FAR 25.703-1—Definitions.
Plain-English Summary
FAR 25.703-1 provides the definitions that control how the Iran-related restrictions in this section are applied. It defines two key terms: "person" and "sensitive technology." The definition of "person" is broad and includes individuals, companies, partnerships, trusts, insurers, guarantors, other nongovernmental entities, and even governmental entities when they are acting as business enterprises, while excluding governments or governmental entities that are not operating as business enterprises. The definition of "sensitive technology" focuses on hardware, software, telecommunications equipment, and other technology intended to restrict the free flow of unbiased information in Iran or to disrupt, monitor, or otherwise restrict speech of the people of Iran, while excluding certain information or informational materials that the President cannot regulate under IEEPA section 203(b)(3). In practice, these definitions determine who can be covered by the rule and what kinds of goods or technology are implicated, which is critical for contractors, subcontractors, and contracting officers screening transactions for Iran-related compliance risk.
Key Rules
Broad definition of person
"Person" includes natural persons, business entities of many kinds, nongovernmental organizations, and governmental entities when they operate as business enterprises. The definition is intentionally expansive so the restriction can reach a wide range of commercial actors and intermediaries.
Successors are included
The term "person" also includes any successor to an entity covered by the definition. This prevents a covered party from avoiding the rule simply by reorganizing, merging, or transferring operations to a successor entity.
Governmental entities usually excluded
A government or governmental entity is not a "person" unless it is operating as a business enterprise. This distinction matters because purely sovereign governmental activity is outside the definition, but commercial-type activity by a government entity can bring it within scope.
Sensitive technology is purpose-based
"Sensitive technology" covers hardware, software, telecommunications equipment, and other technology specifically intended to restrict unbiased information flow in Iran or to disrupt, monitor, or restrict speech of the Iranian people. The focus is on the intended use of the technology, not just its technical form.
Information materials carve-out
The definition excludes information or informational materials that the President lacks authority to regulate or prohibit under IEEPA section 203(b)(3). This preserves the statutory protection for certain informational content and prevents the definition from sweeping in protected materials.
Responsibilities
Contracting Officer
Apply these definitions when evaluating whether a transaction, offeror, subcontractor, or product falls within the Iran-related restrictions in this section. The contracting officer must understand the scope of "person" and "sensitive technology" to make accurate compliance determinations and avoid overbroad or underinclusive application of the rule.
Contractor
Identify whether any entity involved in performance, supply, or financing qualifies as a "person" under this section and determine whether any offered technology could be considered "sensitive technology." Contractors should screen ownership, corporate form, successor relationships, and intended end use to avoid prohibited dealings.
Subcontractor/Supplier
Disclose relevant entity status and product characteristics when they may affect Iran-related compliance. Suppliers should provide accurate information about whether their goods or services involve technology intended for the restricted purposes described in the definition.
Agency
Use the definitions consistently in procurement policy, solicitation review, and compliance enforcement. Agencies should ensure acquisition personnel understand the distinction between covered persons, excluded governmental entities, and the specific scope of sensitive technology.
Practical Implications
These definitions are the gateway to the rest of the Iran-related rule, so getting them wrong can lead to improper exclusions, award protests, or compliance violations.
Contractors should not assume that only private companies count as "persons"; government-owned or government-affiliated entities may still be covered if they operate as business enterprises.
The "sensitive technology" definition is tied to intended use, so documentation about end use, customer, and deployment context can be critical in compliance reviews.
The informational materials exclusion means not every data, publication, or communication item is covered; teams should distinguish protected informational content from regulated technology.
A common pitfall is focusing only on the product itself and ignoring the entity status of the parties involved, including successors and commercial arms of governmental entities.
Official Regulatory Text
As used in this section- Person - (1) Means- (i) A natural person; (ii) A corporation, business association, partnership, society, trust, financial institution, insurer, underwriter, guarantor, and any other business organization, any other nongovernmental entity, organization, or group, and any governmental entity operating as a business enterprise; and (iii) Any successor to any entity described in paragraph (1)(ii) of this definition; and (2) Does not include a government or governmental entity that is not operating as a business enterprise. Sensitive technology - (1) Means hardware, software, telecommunications equipment, or any other technology that is to be used specifically- (i) To restrict the free flow of unbiased information in Iran; or (ii) To disrupt, monitor, or otherwise restrict speech of the people of Iran; and (2) Does not include information or informational materials the export of which the President does not have the authority to regulate or prohibit pursuant to section 203(b)(3) of the International Emergency Economic Powers Act ( 50 U.S.C. 1702(b)(3) ).