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

The correct answer identifies the two types of licenses that the Office of Foreign Assets Control (OFAC) can issue for certain transactions as general licenses and specific licenses.

A general license is a regulatory authorization that allows a category of transactions to be executed without the need for individuals or entities to apply for a specific license. It provides a streamlined approach for transactions that OFAC has deemed acceptable under certain conditions, thereby promoting compliance without unnecessary burdens.

In contrast, a specific license is issued on a case-by-case basis and requires an individual or entity to apply for permission to engage in particular transactions that would otherwise be prohibited under OFAC regulations. This allows for flexibility while still maintaining oversight on transactions that might involve sanctioned individuals or countries.

This distinction is crucial in understanding OFAC's regulatory framework, as it indicates how compliance can be achieved depending on the nature of the transaction involved. Other choices do not accurately describe the licensing structure established by OFAC. For instance, temporary and permanent licenses, corporate and individual licenses, or open-ended and fixed licenses do not represent the terminology and functions associated with OFAC's licensing process.