What are the two types of licenses that OFAC can issue for certain transactions?

The correct answer is that the Office of Foreign Assets Control (OFAC) can issue two types of licenses: general and specific licenses. A general license allows a category of transactions to proceed without the need for a specific application, as it covers a broad range of activities that are permitted under established regulations. This license simplifies compliance by providing clarity on what transactions are allowable.

On the other hand, a specific license is issued for particular transactions that are not covered by a general license. This type of license requires the submission of a request to OFAC, detailing the nature of the transaction and the parties involved. The specific license provides sanction relief on a case-by-case basis, enabling institutions or individuals to engage in transactions that would otherwise be prohibited under OFAC's regulations.

The combination of these two types of licenses allows OFAC to effectively manage compliance and oversight over transactions while providing flexibility to businesses in navigating sanctions regulations.