An entity that engages in a transaction under a general license issued by the Office of Foreign Assets Control (OFAC) must: (Select Two.)

An entity utilizing a general license from the Office of Foreign Assets Control (OFAC) operates under a framework of self-certification. It is the entity's strict responsibility to ensure their proposed transaction falls precisely within the scope, terms, and conditions of the published general license (E). A general license does not provide blanket immunity; it only authorizes the specific activities it describes. Therefore, the entity must still perform due diligence to ensure all other aspects of the transaction, including all parties and underlying activities, are compliant with all relevant sanctions regulations and do not involve other prohibited conduct (B).

A: A suspicious activity report is filed based on suspicion of illicit financial activity, not as a standard requirement for using a general license.

C: One applies for a specific license when a transaction is not authorized by a general license; a general license itself does not require an application.

D: General licenses authorize a wide variety of activities, not just those related to agriculture and medicine, which are only one category of authorizations.

1. ACAMS Certified Global Sanctions Specialist (CGSS) Study Guide, Chapter 4: Sanctions Evasion and Implementation. The guide explains that general licenses authorize a category of transactions without the need to apply to OFAC. It emphasizes that the person or entity using the license is responsible for ensuring the transaction is within the scope of the license and that overall compliance with sanctions regulations is maintained.

2. U.S. Department of the Treasury, Office of Foreign Assets Control (OFAC). "Frequently Asked Questions." FAQ #3 clarifies that "General licenses authorize a particular type of transaction for a class of persons without the need to apply for a license." This places the onus on the entity to determine if their transaction fits. FAQ #10 reinforces that the responsibility for ensuring a transaction complies with OFAC regulations rests with the transacting parties, highlighting the need for comprehensive due diligence beyond the specific terms of one license.