1110. What are key changes made by the May 17, 2024, amendment to 31 CFR § 560.540 in comparison to Iran General License D-2?

On May 17, 2024, OFAC amended 31 CFR § 560.540 of the Iranian Transactions and Sanctions Regulations (ITSR) to incorporate the provisions of General License (GL) D-2 into 31 CFR § 560.540, with certain additional amendments.  Section 560.540 supersedes GL D-2, which OFAC issued on September 23, 2022, 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.  In addition to incorporating GL D-2 into the ITSR, the amended 31 CFR § 560.540 includes several key changes: 

• The list of services, software, and hardware incident to communications authorized for exportation, reexportation, or provision to Iran previously found in the Annex to GL D-2 is now found in the 31 CFR § 560.540 List of Services, Software, and Hardware Incident to Communications.
• Effective [30 DAYS AFTER PUBLICATION] OFAC is amending the 31 CFR § 560.540 List of Services, Software, and Hardware Incident to Communications to exclude laptops, tablets, and personal computing devices with an “Adjusted Peak Performance” (“APP”) exceeding 1 Weighted TeraFLOP (WT). 
• The authorization previously found at paragraph (a)(5) of GL D-2 and now incorporated into 31 CFR § 560.540(a)(5) is revised to authorize transactions for the importation of hardware or software into third countries, in addition to the United States, provided that the items were previously exported to Iran pursuant to an authorization issued pursuant to the ITSR.
• OFAC has added a new 31 CFR § 560.540(a)(7) to authorize the exportation or reexportation of certain services conducted outside Iran to install, repair, or replace hardware or software authorized for exportation, reexportation, or provision to Iran by paragraphs (a)(2) or (3).  The new 31 CFR § 560.540(a)(7) authorizes such services only when the service provider is located outside Iran and does not authorize the service provider to engage in such services while in Iran.
• Section 560.540(b)(3), which incorporates paragraph (b) of GL D-2, is also being revised to clarify the restrictions related to provision of web-hosting services or of domain name registration services in Iran authorized by 31 CFR § 560.540(a) by specifically excluding from authorization the exportation or reexportation of web-hosting services for websites of commercial entities located in Iran or of domain name registration services for or on behalf of the Government of Iran or another person whose property and interests in property are blocked pursuant to Section 560.211 of the ITSR.
• Section 560.540(d) has been added to set forth the case-by-case licensing policy previously set forth in paragraph (d) of GL D-2, for additional activities that support internet freedom in Iran, such as development and hosting of anti-surveillance software by Iranian 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 Updated: May 16, 2024