Legacy Software & CVR Compliance Carveouts Explained

Navigating the Exceptions: Compliance Isn’t One-Size-Fits-All

The Connected Vehicle Rule (CVR) introduces strict prohibitions on the use of connected technologies associated with foreign adversaries, but it doesn’t expect the automotive industry to pivot overnight.

Recognizing the scale of the shift, the U.S. Department of Commerce has proposed two key compliance pathways for companies that cannot immediately remove or replace affected components: the Legacy Software Carveout and the Specific Authorization process.

These mechanisms offer flexibility, but not a free pass. Both options require proactive planning, rigorous documentation, and timely execution to avoid disruption.

In this blog, we’ll break down what these compliance pathways really entail, which types of companies might use them, and why time is already running short to qualify.

The Legacy Software Carveout: Limited Relief with a Deadline

At first glance, the legacy carveout appears to offer welcome relief. For vehicle platforms and components already in production before the rule goes into effect, companies may be permitted to continue using existing software, even if that software would otherwise fall under the CVR’s prohibitions.

But the carveout comes with strict boundaries.

To qualify:

• To the extent the software was designed, developed, manufactured, or supplied by a covered entity, this must have taken place before March 17, 2026.
  
• No material changes can be made to the software by a covered entity (to include designing, developing, manufacturing, or supplying) after the March 17, 2025, cutoff date. That includes functional updates, porting to new platforms, or significant maintenance releases.

The Risk of Relying on Legacy Software Too Long

Relying on legacy software carries several risks:

• Audit exposure: Regulators may scrutinize carveout claims, especially for components that continue receiving patches or show signs of active development.
  
• Future obsolescence: The carveout is time-limited. Vehicles launched after the deadline, or products that evolve beyond their 2026 baseline, will no longer qualify.
  
• Vulnerability stacking: Legacy codebases often include known vulnerabilities; if these cannot be remediated due to frozen development, this increases the long-term security risk.

Specific Authorizations: A Higher Bar with More Scrutiny

For components that cannot be removed and don’t qualify for the legacy carveout, the CVR offers a second path: Specific Authorization.

This process allows companies to petition the U.S. government for permission to use prohibited technology where the applicant can provide:

• A detailed explanation of the component’s function, integration points, and alternatives considered
  
• A technical justification for why the component cannot be replaced without undue harm
  
• A risk mitigation plan, showing how exposure is contained, monitored, or reduced
  
• Evidence that the requesting entity has conducted exhaustive due diligence
  

Requests for Specific Authorizations may take months to evaluate, require supporting evidence from third-party audits or security firms, and may be rejected outright if the perceived risk is too high or alternatives exist.

How Finite State Supports Legacy & Authorization Strategies

At Finite State, we work with OEMs and suppliers to operationalize CVR compliance, including scenarios where legacy components or authorization requests are unavoidable.

Our platform enables teams to:

• Identify which components may qualify for legacy treatment, based on development timelines and integration context.
  
• Track software and firmware change histories to demonstrate compliance with “no material change” rules.
  
• Generate documentation and artifacts that support specific authorization requests.
  
• Map risk across your portfolio, so you can prioritize where replacements or mitigations are most urgently needed.
  

In addition, our advisory services help legal, engineering, and procurement teams align around practical compliance strategies tailored to your architecture, market footprint, and supplier ecosystem.

The Takeaway: Don’t Treat Exceptions as the Plan

The legacy carveout and authorization process are important tools, but they are not long-term solutions. Both are complex, time-bound, and high-stakes.

The companies that move now will have options. Those that wait may find themselves with none, which is why now is the time to talk to our experts or book a demo and see how Finite State can help you navigate carveouts, authorizations, and long-term CVR compliance with confidence.