Can my Indian startup sell encryption software to a client in Iran without breaking sanctions?

In India
Last Updated: Mar 16, 2026
We provide a cloud-based encryption tool and an Iranian company wants to subscribe and pay in euros. I’m unsure if providing software-as-a-service counts as an export and what permissions or checks are required.

Lawyer Answers

Ishan Ganguly

Ishan Ganguly

Mar 29, 2026
In view of the proposed subscription by an Iranian entity for cloud-based encryption services, it is imperative to conduct a rigorous compliance audit to circumvent potential Vitiation of Process under international trade cartels and statutory mandates. The provision of Software-as-a-Service (SaaS) involving cryptographic protocols is legally classified as a "Dual-Use" export, triggering a high degree of Statutory Precision regarding Export Control Classification Numbers (ECCN), specifically under Category 5, Part 2. To avoid an Inscrutable Defense from regulatory bodies, the client must immediately freeze all onboarding procedures and execute a multi-layered verification protocol. This includes performing a comprehensive Denied Party Screening to ensure the entity is not a Specially Designated National (SDN), securing a notarized End-User Statement to negate any "Appellate Sabotage" regarding the software’s final application, and determining if the technology contains a "US Nexus" that would invoke the extraterritorial reach of the ITSR or EAR. Proceeding without a formal "Specific License" or a verified "General License" exception risks severe penal consequences and the permanent blacklisting of the client’s financial channels.
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