§547.508 Payments for legal services from funds originating outside the United States.
(a) Professional fees and incurred expenses. (1) Receipt of payment of professional fees and reimbursement of incurred expenses for the provision of legal services authorized pursuant to §547.507(a) to or on behalf of any person whose property and interests in property are blocked pursuant to §547.201 or any further Executive orders relating to the national emergency declared in E.O. 13413 of October 27, 2006, is authorized from funds originating outside the United States, provided that the funds do not originate from:
(i) A source within the United States;
(ii) Any source, wherever located, within the possession or control of a U.S. person; or
(iii) Any individual or entity, other than the person on whose behalf the legal services authorized pursuant to §547.507(a) are to be provided, whose property and interests in property are blocked pursuant to any part of this chapter or any Executive order or statute.
(2) Nothing in this paragraph (a) authorizes payments for legal services using funds in which any other person whose property and interests in property are blocked pursuant to §547.201(a), any other part of this chapter, or any Executive order has an interest.
(b) Records. Consistent with §§ 501.601 and 501.602 of this chapter, U.S. persons who receive payments pursuant to paragraph (a) of this section must retain for ten years from the date of the relevant payment, and furnish to OFAC on demand, a record that specifies the following for each payment:
(1) The individual or entity from whom the funds originated and the amount of funds received; and
(2) If applicable:
(i) The names of any individuals or entities providing related services to the U.S. person receiving payment in connection with authorized legal services, such as private investigators or expert witnesses;
(ii) A general description of the services provided; and
(iii) The amount of funds paid in connection with such services.
This provision, issued in 2014 or thereafter and common to many blocking based sanctions programs, should be read in conjunction with the GL for the provision of legal services. This provision includes a "fresh funds" requirement and unusual sort of reporting requirement that is not a license application but is nevertheless necessary to benefit from the license. Refer to Notes Common to most Versions of the "Provision of Legal Services" General License (System Ed. Note), also addressing the payments issue. By all appearances, payments for legal services, when not generally licensed, are subject to favorable licensing policies whether or not a given set of sanctions regulations explicitly contains a GL for legal service payments. As discussed in the system note referred to, payments from blocked funds are sometimes authorized.
This is one of the many legal services-related GLs that applies on its face to “any further Executive orders relating to” the national emergency underlying the sanctions regulations at issue. This is notable because GLs do not apply by default in this fashion. See General Note on the Relationship Between Executive Orders, General Licenses and Sanctions Regulations Issued Pursuant to a Common National Emergency (System Ed. Note).
* Recordkeeping portion of the GL amended on 12-17-24.