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OFAC publishes 1 new, over 20 amended FAQs) to clarify Iran-related licensing

The new FAQ:

1110. What are key changes made by Iran General License D-2 in comparison to Iran General License D-1?

Answer

On September 23, 2022, OFAC issued Iran General License (GL) D-2 to further support the provision of communication tools to ordinary Iranians and assist in their efforts to resist repressive internet censorship and surveillance tools deployed by the Iranian government.  GL D-2, which supersedes GL D-1, both expands and clarifies the authorizations in GL D-1 and section 560.540 of the Iranian Transactions and Sanctions Regulations, 31 CFR 560 (ITSR), with respect to the exportation and reexportation, directly or indirectly, from the United States or by a U.S. person, of certain software and services incident to the exchange of communications over the internet.  See FAQ 344 for additional information on how the authorizations in GL D-2 compare to section 560.540 of the ITSR.

Since GL D-1 was issued on February 7, 2014, the types of software and services that support communication over the internet have changed.  To reflect technological developments in communication-related software and services since the issuance of GL D-1 (including in cloud-based services), OFAC issued GL D-2 to expand and clarify the range of U.S. software and services available to Iranians under OFAC’s sanctions program.  For example, GL D-2 explicitly authorizes certain types of software and services for exportation or reexportation to Iran that are incident to communications over the internet, including cloud-based software and services.

GL D-2 expands and clarifies the pre-existing authorizations in several ways, including by making the following changes:

  • Removing the “personal” qualifier from the prior authorizations relating to “personal communications,” which resulted in compliance burdens for companies seeking to verify the personal nature of the communications supported by their software or services;
  • Expanding and clarifying the list of examples of communication tools within the authorizations in paragraphs (a)(1) and (2) to include:  social media platforms, collaboration platforms, video conferencing, e-gaming, e-learning platforms, automated translation, web maps, and user authentication services, as well as cloud-based software and services in support of the foregoing, or of any other activity authorized or exempt under the ITSR; 
  • Expanding the authorization in paragraph (a)(2) for software incident to the exchange of communications over the internet to include software that enables services incident to the exchange of communications over the internet (including cloud-based services);  
  • Clarifying that the authorization in paragraph (a)(4) for the export or reexport of non-commercial grade internet connectivity services includes cloud-based services; and 
  • Expanding the case-by-case licensing policy for activity not authorized by general license or exempt to include additional services that support internet freedom in Iran, such as certain activities relating to the development and hosting of anti-surveillance software by Iranian software developers.  Such services would also include, for example, the development and hosting of anti-censoring software by Iranian software developers and the exportation of certain software development tools to Iranians seeking to create their own anti-surveillance or anti-censorship apps and upload them to mobile app sites. 

Date Released

January 11, 2023

Frequently Asked Question 1110

Iran Sanctions

853. Can U.S. academic institutions provide online learning services to Iranian students who are not physically present in the United States because of the Coronavirus Disease 2019 (COVID-19) pandemic?  Can U.S. technology companies provide software and services to assist Iranian students in accessing online coursework?

General licenses issued under the Iranian Transactions and Sanctions Regulations (ITSR) authorize certain U.S. academic institutions and other U.S. persons to provide certain services and software to Iranian students.  These general licenses include:

  • General License G (GL G) authorizes accredited graduate and undergraduate degree-granting U.S. academic institutions, including their contractors, to export services to students located in Iran, or located outside of Iran but who are ordinarily resident in Iran (“Iranian students”), to sign up for and participate in certain undergraduate level online courses, notably:  (i) courses in the humanities, social sciences, law, or business that are the equivalent of courses ordinarily required for the completion of undergraduate degree programs in the humanities, social sciences, law, or business; and (ii) introductory undergraduate level science, technology, engineering, or mathematics courses ordinarily required for the completion of undergraduate degree programs in the humanities, social sciences, law, or business.  In addition, under Section 560.405 of the ITSR, certain transactions ordinarily incident to a licensed transaction are also authorized.  OFAC interprets Section 560.405 of the ITSR to authorize certain transactions ordinarily incident to courses authorized by GL G, including the giving of assignments and testing and grading of Iranian students. 
  • General License M-2 (GL M-2) authorizes, on a time-limited basis, accredited graduate and undergraduate degree-granting U.S. academic institutions, including their contractors, to export additional services to those Iranian students who are eligible for non-immigrant classification under categories F (students) or M (non-academic students), and have been granted a nonimmigrant visa by the U.S. State Department, but are not physically present in the United States due to the COVID-19 pandemic.  Specifically, GL M-2 authorizes the provision of certain online educational services related to:  educational courses that are (i) the equivalent of courses ordinarily required for the completion of graduate degree programs in the humanities, social sciences, law, or business; and (ii) introductory science, technology, engineering, or mathematics courses ordinarily required for the completion of graduate degree programs in the humanities, social sciences, law, or business.  OFAC interprets Section 560.405 of the ITSR to authorize certain transactions ordinarily incident to courses authorized by GL M-2, including the giving of assignments and testing and grading of Iranian students.  GL M-2 also authorizes the exportation of certain software to facilitate the participation of certain Iranian students in certain online educational activities, as explained further below.  GL M-2 authorizes covered activities through 12:01 a.m. eastern daylight time, September 1, 2023. 
  • Section 560.540 of the ITSR and General License D-2 authorize the exportation to Iran of certain services and software incident to the exchange of communications over the internet, such as instant messaging, chat and email, social networking, sharing of photos and movies, web browsing, blogging, social media platforms, collaboration platforms, video conferencing, e-gaming platforms, e-learning platforms, automated translation, web maps, and user authentication services, as well as cloud-based services.  OFAC interprets these authorizations to cover video conferencing software and related services, as well as educational technology software and related services, that allow students to view courses and course materials, complete tests and assignments, receive grades, participate in discussions, and other, similar course-related online activity, provided that the software meets the additional criteria of the applicable authorization.  For more guidance on Section 560.540 of the ITSR and General License D-2, please see FAQs 1110338–348434–443, and 1087–1089.  In addition, GL M-2 also authorizes the exportation of certain software in order to facilitate participation in online educational activities described in GL G and GL M-2 by Iranian students who are eligible for non-immigrant classification under categories F (students) or M (non-academic students), and have been granted a nonimmigrant visa by the U.S. State Department, but are not physically present in the United States due to the Covid-19 pandemic.

To export services to Iranian students that fall outside of these authorizations, U.S. persons may apply for a specific license through the OFAC License Application Page.  OFAC is committed to mitigating the adverse impacts of the COVID-19 pandemic and prioritizes the review of specific license applications to provide online learning services to Iranian students who are not physically present in the United States because of the COVID-19 pandemic.  

Please note that the general licenses summarized above do not authorize the exportation of goods (including software), services, or technology to the Government of Iran or to persons blocked under any authority administered by OFAC, including OFAC’s counterterrorism or counterproliferation authorities. 

Date Updated: January 11, 2023

Updated on 01/11/2023

Compliance for Internet, Web Based Activities, and Personal Communications

443. What are “residential consumer” satellite terminals and transceiver equipment for the purposes of category (4) of the Annex to General License (GL) D-2?

Satellite terminals and other equipment listed in category (4) of the Annex to GL D-2, shall be deemed “residential consumer” if the equipment is designated EAR99 or classified under ECCN 5A992.c, 5A991.b.2, or 5A991.b.4 or, in the case of equipment that is not subject to the EAR, would be designated EAR99 if it were located in the United States or would meet the criteria for classification under ECCN 5A992.c, 5A991.b.2, or 5A991.b.4 if it were subject to the EAR. 

Date Updated: January 11, 2023

Updated on 01/11/2023

Compliance for Internet, Web Based Activities, and Personal Communications

442. For purposes of category (5) of the Annex to General License (GL) D-2, what would be considered “software required for effective consumer use” of personal computing devices, laptops, and tablets?

“Software required for effective consumer use” consists of software essential to the operation of the hardware listed in category (5) of the Annex to GL D-2 , including, for example, drivers and patches. Operating systems are separately authorized in category (5) of the Annex to GL D-2.

Date Updated: January 11, 2023

Updated on 01/11/2023

Compliance for Internet, Web Based Activities, and Personal Communications

441. Does General License (GL) D-2 authorize the exportation of fee-based cloud computing services to Iran?

Yes.  Paragraph(a)(1) of GL D-2 authorizes the exportation to Iran of fee-based cloud computing services that support the exchange of communications over the internet.  In addition, paragraph (a)(2)(i) authorizes software that is incident to, or enables services incident to, the exchange of communications over the internet, and paragraph (a)(3) authorizes software described in the Annex to GL D-2 and services necessary for the operation of such software, in both cases provided that such software is designated EAR99 or classified by the U.S. Department of Commerce on the CCL under ECCN 5D992.c or, in the case of software that is not subject to the EAR, would be designated EAR99 if it were located in the United States or would meet the criteria for classification under ECCN 5D992.c if it were subject to the EAR.  Please see FAQ 1087–1089 for additional guidance. 

Date Updated: January 11, 2023

Updated on 01/11/2023

Compliance for Internet, Web Based Activities, and Personal Communications

440. Does General License (GL) D-2 authorize the exportation to Iran of fee-based desktop publishing software and productivity software suites used to publish documents, presentations, spreadsheets, charts, music, movies, and digital images?

Yes.  Fee-based desktop publishing software and productivity software suites have been determined to fall within the scope of fee-based software that enables services incident to the exchange of communications as described in paragraph (a)(2) of GL D-2, provided that the software meets the additional criteria in those paragraphs (e.g., for software subject to the EAR, the software is designated EAR99 or is classified by the U.S. Department of Commerce on the Commerce Control List, 15 CFR part 774, supplement No. 1 (“CCL”) under ECCN 5D992.c).  By contrast, enterprise management software has been determined not to fall within the scope of fee-based software that enables services incident to the exchange of communications as described in paragraph (a)(2) of GL D-2.

Date Updated: January 11, 2023

Updated on 01/11/2023

Compliance for Internet, Web Based Activities, and Personal Communications

439. Does General License (GL) D-2 authorize the export of bundled software that includes both software authorized by GL D-2 and software that is not authorized by GL D-2?

No.  To qualify for GL D-2, all individual software items in a bundled package must fall within one of GL D-2 authorizations.  If some software in a bundled package is authorized by GL D-2 but other software is not, the portion of the software falling outside the authorizations in GL D-2 would need to be otherwise exempt or authorized or would require a specific license for export.  A bundle of software that included exclusively software authorized by GL D-2 and by 31 CFR § 560.540 could be exported.  Please see FAQs 1087–1088 for guidance on certain types of cloud-based software authorized by GL D-2. 

Date Updated: January 11, 2023

Updated on 01/11/2023

Compliance for Internet, Web Based Activities, and Personal Communications

438. Is the exportation of parts or components for authorized hardware, such as microprocessors, authorized under General License (GL) D-2?

No.  While the exportation of certain accessories and peripherals specified in categories (1) and (5) of the Annex to GL D-2 , is authorized under paragraph (a)(3) of GL D-2, the exportation of hardware parts or components is not.  Requests for specific licenses to export parts or components, including replacement parts, will be considered on a case-by-case basis.

Date Updated: January 11, 2023

Updated on 01/11/2023

Compliance for Internet, Web Based Activities, and Personal Communications

437. Are mobile phone accessories and computer accessories and peripherals authorized for export under General License (GL) D-2?

Yes.  Accessories for use in conjunction with hardware specified in categories (1) and (5) of the Annex to GL D-2 , and peripherals for use in conjunction with hardware specified in category (5) of the same are authorized for export to Iran under GL D-2.  Authorized accessories for mobile phones include headsets, cases, holsters, mounts, chargers, docks, display protectors, cables, adapters, and batteries.  Authorized accessories for computers include keyboards and mice; authorized peripherals for computers include consumer disk drives and other data storage devices.  As set forth in a note to the Annex to GL D-2, for the purposes of the Annex, the term “consumer” refers to items that are: (1) generally available to the public by being sold, without restriction, from stock at retail selling points by means of any of the following: (a) over-the-counter transactions; (b) mail order transactions; (c) electronic transactions; or (d) telephone call transactions; and (2) designed for installation by the user without further substantial support by the supplier.

Date Updated: January 11, 2023

Updated on 01/11/2023

Compliance for Internet, Web Based Activities, and Personal Communications

436. What do Secure Socket Layers (SSLs), listed in the Annex to General License (GL) D-2 encompass?

SSLs, as described in category (11) of the Annex to GL D-2 encompass “provisioning and verification software for Secure Socket Layer (SSL) certificates designated EAR99 or classified under ECCN 5D992.c, and services necessary for the operation of such software.”  Additional provisioning and verification software not subject to the EAR may be included under GL D-2’s authorization for, in relevant part, software not subject to the EAR that is exported or reexported, directly or indirectly, by a U.S. person located outside the United States, that is of a type described in the Annex to GL D-2, provided that it would be eligible for classification under an ECCN listed in the Annex (ECCN 5D992.c), or designated as EAR99, if it were subject to the EAR.

Date Updated: January 11, 2023

Updated on 01/11/2023

Compliance for Internet, Web Based Activities, and Personal Communications

435. Is the exportation of anti-virus, anti-malware, anti-tracking, and anti-censorship software authorized under General License (GL) D-2?

Yes.  Paragraph (a)(3) of GL D-2 authorizes the exportation of certain anti-virus, anti-malware, anti-tracking, and anti-censorship software, as specified in categories (6), (7), and (9) of the Annex to GL D-2.

Date Updated: January 11, 2023

Updated on 01/11/2023

Compliance for Internet, Web Based Activities, and Personal Communications

434. Are all applications designed to run on mobile operating systems (“apps”) covered by General License (GL) D-2?

The exportation to Iran of apps that are designated EAR99 or classified under export control classification number (ECCN) 5D992.c, as specified in category (8) of the Annex to GL D-2, is authorized under the GL D-2, including apps downloaded via online app stores.

Date Updated: January 11, 2023

Updated on 01/11/2023

Iran Sanctions

348. May U.S. persons employ agents in Iran to facilitate sales, create or fund a physical sales presence on the ground in Iran, or utilize Iranian commercial marketing services in furtherance of exports authorized under General License (GL) D-2?

No.  GL D-2 does not authorize the employment of persons in Iran to facilitate sales, the maintenance of a physical sales presence in Iran, or the utilization of Iranian marketing services.  However, certain copy-ready advertising materials are exempt from the prohibitions of the ITSR to the extent they qualify as information or informational materials pursuant to 31 C.F.R. § 560.210(c).  

Date Updated: January 11, 2023

Updated on 01/11/2023

Iran Sanctions

346. What kind of due diligence is required for the exportation of fee-based services, software, or hardware authorized by General License (GL) D-2?

Due diligence programs should be tailored to the particular risks encountered by exporters.  

As a general matter, companies selling fee-based services, software, or hardware authorized by GL D-2 should undertake reasonable, risk-based measures designed to ensure that they do not export their products to persons whose property and interests in property are blocked pursuant to any sanctions program administered by OFAC, regardless of whether the Government of Iran or other end-user appears on OFAC’s Specially Designated Nationals and Blocked PersonsList (or any of OFAC’s other sanctions lists). 

See FAQ 1088 for more information regarding OFAC’s due diligence expectations for cloud-based service or software providers whose services and software support communications tools are authorized by GL D-2. 

Date Updated: January 11, 2023

Updated on 01/11/2023

Iran Sanctions

345. How can U.S. companies arrange for payment from Iran for exports authorized under General License (GL) D-2?

In general, the payment requirements under GL D-2 are the same as for all other general licenses under the Iranian Transactions and Sanctions Regulations (ITSR).  Section 560.516 of the ITSR authorizes U.S. depository institutions to process transfers of funds to or from Iran, or for the direct or indirect benefit of persons in Iran or the Government of Iran, if the transfer arises from, and is ordinarily incident and necessary to give effect to, an underlying transaction that has been authorized by a specific or general license issued pursuant to the ITSR and does not involve debiting or crediting an Iranian account. 31 C.F.R. § 560.516(a).

Date Updated: January 11, 2023

Updated on 01/11/2023

Iran Sanctions

344. How do the authorizations in paragraphs (a)(1), (a)(2), and (a)(6) of General License (GL) D-2 compare to the general license in 31 C.F.R. § 560.540 authorizing certain services and software incident to internet-based communications?

Section 560.540 authorizes the exportation from the United States or by U.S. persons, wherever located, to persons in Iran of no-cost services incident to the exchange of personal communications over the internet and no-cost software necessary to enable such services.  Please also see OFAC’s Interpretive Guidance and Statement of Licensing Policy on Internet Freedom in Iran (March 20, 2012). 

See https://home.treasury.gov/system/files/126/internet_freedom.pdf.  Paragraphs (a)(1) and (a)(2) of GL D-2 go beyond § 560.540 by, among other things, authorizing fee-based services and software incident to the exchange of communications over the internet.

In addition, to further ensure that the sanctions on Iran do not have an unintended chilling effect on the willingness of companies to make available certain publicly available, no-cost communications tools to persons in Iran, pursuant to paragraph (a)(6) of GL D-2, the exportation, reexportation, or provision to the Government of Iran of certain publicly available, no-cost services and software described in § 560.540(a) or categories (6) through (11) of the Annex to GL D-2 is authorized. U.S. persons continue generally to be prohibited from exporting goods and services to persons whose property and interests in property are blocked pursuant to any part of 31 C.F.R. chapter V, other than Government of Iran end-users blocked solely pursuant to Executive Order 13599.  See GL D-2 paragraph (b)(2).  Prohibited end-users include Iranian persons whose property and interests in property are blocked pursuant to OFAC authorities relating to WMD proliferation, terrorism, and human rights abuses. In addition, GL D-2 does not authorize any action or activity involving any item (including information) subject to Commerce’s Export Administration Regulations (EAR) that is prohibited by, or otherwise requires a license under, part 774 of the EAR or participation in any transaction involving a person whose export privileges have been denied pursuant to part 764 or 766 of the EAR, without authorization from the Department of Commerce. 
Date Updated: January 11, 2023

Updated on 01/11/2023

Iran Sanctions

343. Does General License (GL) D-2 continue to authorize the exportation to Iran and importation into the United States of communication devices by persons travelling from the United States to Iran and back to the United States?

Yes. GL D-2 continues to authorize both the exportation, reexportation, or provision to Iran and the importation into the United States by an individual entering the United States directly or indirectly from Iran, of hardware and software authorized by 31 C.F.R. § 560.540(a), paragraph (a)(2) or (a)(3) of GL D-2, or paragraph (a)(2) or (a)(3) of GL D-1 when it was in effect, provided that the items were previously exported, reexported, or provided by the individual to Iran. See GL D-2, paragraph (a)(5) and the Note to paragraphs (a)(2) and (a)(3).  See FAQ 1110.

Date Updated: January 11, 2023

Updated on 01/11/2023

Iran Sanctions

342. Does General License (GL) D-2 continue to authorize U.S. persons located outside the United States to export or reexport to Iran certain specified hardware or software that is not subject to Commerce’s Export Administration Regulations (EAR)?

Yes.  GL D-2 continues to authorize the exportation, reexportation, or provision to Iran by U.S. persons located outside of the United States of certain specified hardware and software items that are not subject to the EAR.  See GL D-2, paragraphs (a)(2)(ii) and (a)(3).  GL D-2 continues to extend this authorization to an entity owned or controlled by a U.S. person and established or maintained outside the United States (“a U.S.-owned or -controlled foreign entity”), subject to the conditions set forth in 31 C.F.R. § 560.556.  See GL D-2, Note 2 to paragraph (a).  For example, an overseas branch of a U.S. company or a U.S.-owned or -controlled foreign entity may export to Iran, from a location outside the United States, certain hardware or software that is not subject to the EAR (including foreign-origin hardware or software containing less than a de minimis amount of U.S. controlled content) if the hardware or software is within the scope of the GL D-2 authorization.  GL D-2 also authorizes the exportation, reexportation, or provision of certain fee-based software that is not subject to the EAR because it is described in section 734.3(b)(3) of the EAR. 

Please review GL D-2 and related FAQs 108710881089, and 1110 for guidance on what hardware, software, and services are authorized for exportation or reexportation to Iran.

Date Updated: January 11, 2023

Updated on 01/11/2023

Iran Sanctions

341. May a non-U.S. person export, reexport, or provide to Iran hardware and software that is subject to Commerce’s Export Administration Regulations (EAR) pursuant to General License (GL) D-2? 

Yes.  For purposes of the authorities administered by OFAC, GL D-2 authorizes the exportation, reexportation, or provision of certain hardware and software subject to the EAR by non-U.S. persons outside the United States.  See GL D-2, paragraphs (a)(2)(i) and (a)(3).  For example, a non-U.S. person manufacturer of smartphones that are (a) subject to the EAR because they contain more than a de minimis amount of U.S.-controlled content and (b) within the scope of the GL D-2 authorization may export the smartphones from its third-country manufacturing facility directly or indirectly to Iran. See FAQs 1110 and 1087–1089.

Date Updated: January 11, 2023

Updated on 01/11/2023

Iran Sanctions

340. What should I do if I am unsure whether an item or service is covered by General License (GL) D-2?

If you require assistance interpreting the authorizations contained in GL D-2and how they apply to your situation, please contact OFAC’s Sanctions Compliance and Evaluation Division by phone at 202-622-2490 or by email at OFAC_Feedback@treasury.gov or submit a request for interpretive guidance with OFAC’s Licensing Division online at http://www.home.treasury.gov/policy-issues/financial-sanctions/ofac-license-application-page.

Date Updated: January 11, 2023

Updated on 01/11/2023

Iran Sanctions

339. With respect to General License (GL) D-2 authorization in paragraph (a)(3), do exporters need to make a determination as to whether an export of an item or service listed in the Annex to GL D-2 is “incident to communications”?

No.  The Annex lists software, hardware, and related services determined to be “incident to communications” for purposes of the authorization in paragraph (a)(3) of GL D-2.

Date Updated: January 11, 2023

Updated on 01/11/2023

Iran Sanctions

338. With respect to General License D-2 authorizations in paragraphs (a)(1) and (a)(2), what services and software are covered?

Qualifying services under paragraph (a)(1) are those that are “incident to the exchange of personal communications over the internet,” as well as cloud-based services in support of such services or of any other transaction authorized or exempt under the ITSR.  Qualifying software under paragraph (a)(2) is software that is incident to, or enable services incident to, the exchange of communications over the internet, as well as cloud-based services in support of the foregoing or of any other transaction authorized or exempt under the ITSR.  In addition, qualifying software under paragraph (a)(2) must meet the stated export control-related criteria.  Both paragraphs provide an illustrative but not exhaustive list of the types of services that are authorized: “instant messaging, chat and email, social networking, sharing of photos and movies, web browsing, blogging, social media platforms, collaboration platforms, video conferencing, e-gaming, e-learning platforms, automated translation, web maps, and user authentication services, as well as cloud-based services in support of the foregoing or of any other transaction authorized or exempt under the ITSR.”  See FAQ 344 and OFAC’s Interpretive Guidance and Statement of Licensing Policy on Internet Freedom in Iran (March 20, 2012), available at https://home.treasury.gov/system/files/126/internet_freedom.pdf

Qualifying services or software need not be specifically listed in the Annex in order to be authorized by paragraph (a)(1) or (a)(2), provided that they otherwise meet the requirements of paragraph (a)(1) or (a)(2).

Date Updated: January 11, 2023

Updated on 01/11/2023

Iran Sanctions

337. Are software and services that were authorized under General License (GL) D-1 still authorized under GL D-2? 

Yes, software and services that were authorized under GL D-1 continue to be authorized pursuant to GL D-2.  See FAQs 1110 and 338–344 for additional information on services authorized pursuant to GL D-2.  

Date Updated: January 11, 2023

Updated on 01/11/2023

Amended Frequently Asked Questions (FAQ)

Links:

OFAC Notice

New FAQ (1110)

Amended FAQs

Categories: Frequently Asked Questions (FAQ) Guidance Iranian Sanctions OFAC Updates

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