{"id":67136,"date":"2026-09-21T10:39:27","date_gmt":"2026-09-21T17:39:27","guid":{"rendered":"https:\/\/seidenlaw.com\/?p=67136"},"modified":"2026-09-21T10:46:58","modified_gmt":"2026-09-21T17:46:58","slug":"ofac-establishes-presumption-of-denial-for-iran-related-specific-licenses-what-businesses-need-to-know","status":"publish","type":"post","link":"https:\/\/seidenlaw.com\/he\/blog\/2026\/09\/ofac-establishes-presumption-of-denial-for-iran-related-specific-licenses-what-businesses-need-to-know\/","title":{"rendered":"OFAC Establishes Presumption of Denial for Iran-Related Specific Licenses: What Businesses Need to Know"},"content":{"rendered":"

On September 10, 2026, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) announced a fundamental shift in its licensing policy for Iran-related transactions, issued in furtherance of the Treasury Department’s Operation Economic Outcast.1<\/a><\/sup> OFAC has established a presumption of denial for requests for specific licenses to engage in activities prohibited by the Iranian Transactions and Sanctions Regulations (ITSR), 31 C.F.R. part 560, and other Iran-related sanctions authorities.2<\/a><\/sup> This alert summarizes the new Statement of Licensing Policy, explains what it means in practice, and outlines steps that affected businesses and individuals should consider.<\/p>\n

Operation Economic Outcast<\/h2>\n

Operation Economic Outcast signals a more aggressive U.S. posture toward Iran-related activity. Actions under Operation Economic Outcast have included (1) sectoral determinations covering digital assets, technology, gold, aviation, and shipping; (2) additional sanctions on entities, individuals, and vessels; (3) the suspension of several general licenses concerning Iran; (4) updates to FinCen\u2019s whistleblower incentive program concerning Iran; and (5) coming to a $1,427,230 settlement concerning apparent violations of Iran-related sanctions regulations.<\/p>\n

The September 10 Policy: Presumption of Denial<\/h2>\n

Effective September 10, 2026, OFAC adopted a presumption of denial for Iran-related specific-license requests. In plain terms, denial is now the default starting expectation for any application. OFAC has also suspended all previously issued statements of licensing policy that had provided a more favorable posture for certain Iran-related activities.<\/p>\n

A specific license is an individualized, written authorization permitting a particular person or entity to engage in a transaction that would otherwise be prohibited under OFAC\u2019s sanctions regulations. Businesses, financial institutions, and individuals have historically applied for specific licenses to carry out a range of Iran-related activities. A general license permits certain activities without the need for OFAC to approve the license on an individual basis.<\/p>\n

OFAC\u2019s adoption of a presumption of denial does not make it legally impossible to obtain an Iran-related specific license. However, Iran-related specific licenses may now be issued only when required by law or in exceptional and urgent circumstances, such as risk to life, limb, or environmental safety. Applicants who submit requests through the OFAC Licensing Portal must include a written attestation demonstrating that their proposed activity meets this narrow standard. OFAC will evaluate each application on a case-by-case basis, in consultation with the Department of State.<\/p>\n

Treasury also stated that OFAC\u2019s Licensing Division immediately began denying the vast majority of outstanding Iran-related specific-license requests. Our own experience and anecdotal understanding is that such denials are now being broadly issued. Treasury also announced that \u201cOFAC will maintain this licensing policy until Iran changes its behavior, including obstructing the Strait of Hormuz, attacking U.S. personnel and partners in the Gulf, and pursuing nuclear and conventional weapons.\u201d3<\/a><\/sup><\/p>\n

Practical Implications<\/h2>\n

Pending Applicants.<\/strong> Organizations with applications already before OFAC should be aware that most outstanding requests for Iran-related specific licenses are being denied. Applicants should reassess the feasibility of their proposed activities, avoid commitments conditioned on uncertain authorization, and be prepared for delay or outright denial. Where an applicant believes its circumstances qualify as exceptional and urgent, it should work with sanctions counsel to preserve and submit detailed supporting evidence.<\/p>\n

Prospective Applicants.<\/strong> Anyone considering a new Iran-related specific-license application faces a significantly narrower path to approval. Prospective applicants should work with sanctions counsel to evaluate whether their proposed activity falls within the limited categories that may still be authorized\u2014principally, situations involving a statutory requirement or genuine risk to life, limb, or environmental safety. Additional lead time and contingency planning are essential.<\/p>\n

Current License Holders.<\/strong> The September 10 statement does not state that existing, validly issued specific licenses are automatically revoked. However, license holders should promptly review the text, scope, expiration date, conditions, and reporting obligations of each license they hold, as well as any related OFAC guidance. Before relying on, renewing, amending, or expanding any licensed activity, holders should seek qualified legal advice. At the very least, license holders should recognize that they now face heightened residual or secondary exposure to sanctions.<\/p>\n

Broader Compliance Considerations.<\/strong> A specific license typically authorizes only the particular activity described and does not eliminate other sanctions restrictions. All property and interests in property of the designated or blocked persons described above that are in the United States or in the possession or control of U.S. persons automatically become blocked and must be reported to OFAC. In addition, any entities that are owned, directly or indirectly, individually or in the aggregate, 50 percent or more by one or more blocked persons are also blocked. Violations of U.S. sanction regulations may result in the imposition of civil or criminal penalties on both U.S. and foreign individuals and entities. Businesses should conduct proper know-your-customer procedures before engaging in matters that may implicate Iran. This includes a thorough review of counterparties, payment channels, downstream customers, correspondent banks, logistics providers, beneficial owners, possible sham transactions, and any U.S.-person involvement. There are multiple tools that competent counsel can use to advise businesses as to the above. Experienced sanctions counsel should no longer be engaged to simply engage with OFAC; affected firms should consider retaining counsel for a more general compliance audit.<\/p>\n

Businesses with any touchpoints\u2014including through their customers\u2019 and suppliers\u2019 counterparties\u2014to Iran-related trade should monitor developments under this campaign closely and work with counsel concerning next steps. We will continue to keep our clients and colleagues informed in this rapidly evolving regulatory arena.<\/p>\n

This article is provided for general informational purposes only and does not constitute legal advice. Readers should consult counsel concerning their particular circumstances.<\/em><\/p>\n

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    \n
  1. See <\/em>U.S. Dep\u2019t of the Treasury, Treasury Launches Unprecedented Campaign Against Iranian Regime on Economic D-Day<\/em> (Aug. 24, 2026), https:\/\/home.treasury.gov\/news\/press-releases\/sb0613<\/a>. \u21a9<\/a><\/li>\n
  2. <\/em>OFAC, Iran-related and Counter Terrorism Designations; Licensing Policy Update under Operation Economic Outcast; Settlement Agreement between OFAC and an Individual<\/em> (Sept. 10, 2026), https:\/\/ofac.treasury.gov\/recent-actions\/20260910<\/a>.; U.S. Dep’t of the Treasury, OFAC, Statement of Licensing Policy on Iran-Related Requests<\/em> (Sept. 10, 2026), https:\/\/ofac.treasury.gov\/media\/936916\/download?inline<\/a> (\u201cStatement of Licensing Policy\u201d). \u21a9<\/a><\/li>\n
  3. U.S. Dep\u2019t of the Treasury, Operation Economic Outcast Strikes Iran\u2019s Global Terrorist Proxy Network<\/em> (Sept. 10, 2026), https:\/\/home.treasury.gov\/news\/press-releases\/sb0626<\/a>. \u21a9<\/a><\/li>\n<\/ol>","protected":false},"excerpt":{"rendered":"

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