Counter-Terrorism Licensing Policy
This page sets out the licensing policy which applies to designated persons under the ISIL (Da’esh) and Al-Qaida (United Nations Sanctions) (EU Exit) regime, the Counter-Terrorism (International Sanctions) (EU Exit) regime and the Counter-Terrorism (Sanctions) (EU Exit) regime
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Licences authorise certain activities or types of transaction that would otherwise be prohibited by sanctions legislation. In addition to issuing licences relating to a specific person, HM Treasury may also issue general licences which authorise otherwise prohibited activity by a particular category of persons (who fall within the licence criteria).
The overall objective of the licensing system for terrorism designations is to strike an appropriate balance between minimising the risk of diversion of funds to terrorism and respecting the human rights of designated persons and other third parties.
HM Treasury only grants licences where there is a legitimate need for such activities or transactions to proceed and where they can proceed without giving rise to any risk of terrorist finance. This helps to ensure that the sanctions regime remains effective, fair and proportionate in its application.
Licensing derogations
Licensing derogations vary according to the applicable regime. Under the ISIL (Da’esh) and Al-Qaida (United Nations Sanctions) (EU Exit) regime, licences may only be issued in respect of basic and extraordinary expenses.
This mirrors the UN Security Council Resolution which they implement. Under the Counter-Terrorism (International Sanctions) (EU Exit) regime and the Counter-Terrorism (Sanctions) (EU Exit) regime. HM Treasury has a broader discretion to grant licences.
Licence conditions
In order to license in a proportionate manner whilst mitigating the risk of terrorist financing, HM Treasury may also attach conditions to licences. Licence conditions apply safeguards to ensure funds or economic resources can only be made available to designated persons in a way that protects against terrorist financing risks. This allows the granting of licences HM Treasury might otherwise not be able to grant.
The conditions HM Treasury applies to counter-terrorism regime licences reflect two broad policy objectives:
- to ensure that designated persons do not have access to large amounts of cash, which can be more easily diverted to terrorist activity
- to ensure that there is an audit trail to address terrorist finance risks and HM Treasury can monitor compliance with the terms of the licence and identify if any breaches of the relevant legislation have occurred.
General Licences
In addition to issuing licences relating to a specific person, HM Treasury may also issue general licences, which authorise otherwise prohibited activity by a particular category of persons (who fall within the licence criteria). General licences can be used without making an application to OFSI.
Details
This licence permits the Legal Aid Agency (LAA) to make payments to solicitors representing a designated person where the LAA has assessed that the individual is eligible for legal aid, and for those funds to be applied by the solicitors to meet the legal costs incurred in the course of advising and representing the designated person.
No funds may be made directly available to a designated person under this licence.
Applicants should note that Treasury licences do not determine entitlement to receive specific funds, goods or services. For example, the general licence above covering legal aid does not determine entitlement to legal aid.
Entitlement to legal aid in the UK remains a matter for the LAA, and other authorities in devolved nations. The licence simply means that where a designated person is entitled to legal aid the provision of those funds will not be a breach of sanctions legislation.
This general licence is issued under, and only applies to, the ISIL (Da’esh) and Al-Qaida (United Nations Sanctions) (EU Exit) regime, the Counter-Terrorism (International Sanctions) (EU Exit) regime and the Counter-Terrorism (Sanctions) (EU Exit) regime.
Transitional provisions
Extant licences that were issued by OFSI for counter-terrorism designations will generally continue to remain valid until they expire or are revoked. On 11 January 2021, HM Treasury revoked 3 general licences which related to the provision of insurance and the payment of legal fees by third parties.
These may no longer be used and future applications relating to insurance policies and the payment of legal fees by third parties will be assessed on a case-by-case basis. Where a payment is no longer covered by a general licence, you should contact HM Treasury to apply for an individual licence.
HM Treasury revoked and replaced the general licence relating to legal aid.
Financial Services
The ISIL (Da’esh) and Al-Qaida (United Nations Sanctions) (EU Exit) Regulations 2019 do not prohibit making financial services available to a designated person. This means insurers do not require a licence under this regime to provide insurance to any persons sanctioned by the UN under this regime.
However, under this UN regime, it is still prohibited to ‘deal’ with frozen funds without a valid licence, e.g. by receiving the insurance premium payments from a designated person. It is also prohibited to make payments from a policy to a designated person, without a valid licence.
For more information as to the meaning of ‘dealing’, please refer to the Regulations as outlined above and to OFSI Guidance.
By contrast, both the Counter-Terrorism (International Sanctions) (EU Exit) Regulations 2019 and the Counter-Terrorism (Sanctions) (EU Exit) Regulations 2019 do prohibit making financial services available to a designated person.
Section 61 of the Sanctions and Anti-Money Laundering Act 2018 defines ‘financial services’ as including but not limited to ‘insurance-related services’ consisting of:
- direct life assurance;
- direct insurance other than life assurance;
- reinsurance and retrocession;
- insurance intermediation, such as brokerage and agency;
- services auxiliary to insurance, such as consultancy, actuarial, risk assessment and claim settlement services;
Under these two regimes and where the relevant insurer is providing a designated person with insurance or any other financial service, insurers would need a licence from OFSI prior to providing the relevant designated person with insurance or other financial service. As above, it is also prohibited under these two regimes to ‘deal’ with frozen funds without a valid licence or make payments from the policy(ies) to a designated person, directly or indirectly, without a valid licence.
Individual licence applications
For new individual licence applications or amendments, applicants should write to OFSI at [email protected] setting out the full facts and details of the licence needed.
Licensing for other regimes
Details on the Treasury’s approach to licensing for other sanctions regimes can be found in our general guidance
Updates to this page
Published 24 May 2013Last updated 21 May 2021 + show all updates
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Amended the General Licence
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Updated with General Licence INT/2020/G1
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Revoked 3 general licences and revoked and replaced 1 relating to legal aid
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Updated to reflect regimes coming into force under the Sanctions Act
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Updated: removed the section about funds of designated persons who are in, or due to be released from, prison.
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updated all attachments
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First published.