AWS Bans Sub-Account Transfers: What CFOs Need to Know

As of June 2025, Amazon Web Services (AWS) has banned vendors from moving accounts in and out of your Org to pass on commitments. Here’s how to spot if it’s happening to you.

If your company uses third-party AWS optimization vendors, you could be unknowingly violating AWS Terms of Service.

AWS officially banned "sub-account transfers" as of June 1, 2025, yet many vendors continue using this prohibited practice as a loophole to manage their customers’ commitments. Because these commitments run through your AWS Organization, AWS treats the non-compliance as your responsibility, not the vendor’s.

With cloud serving as mission-critical infrastructure, being out of compliance with AWS’s Terms of Service represents a direct business risk. If AWS cuts off non-compliant discounts, you could be forced onto on-demand rates overnight. For growth-stage SaaS companies already defending unit economics to investors, that kind of cost shock can derail valuation conversations and funding rounds.

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What Are Sub-Account Transfers?

Sub-account transfers are a vendor workaround that creates an illusion of savings without actually transferring legal ownership of AWS commitments to your company. Here's how the scheme typically works:

1. The vendor purchases Reserved Instances (RIs) or Savings Plans (SPs) in an AWS account they own and control, not your account.
2. The vendor moves their commitment-holding account into your AWS Organization, allowing your workloads to benefit from those discounts.
3. When commitments expire or are no longer needed, the vendor removes their account from your Organization and shuffles it to another customer.

While your AWS bill shows the discounts, the legal commitments remain tied to vendor-owned accounts. You're essentially renting access to commitments that could disappear at any time, with no recourse if the vendor decides to move them elsewhere.

This practice artificially inflates vendor effectiveness metrics while exposing your company to significant financial and operational risk.

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AWS Confirms Sub-Account Transfers Are Prohibited

AWS leadership has provided definitive guidance that removes any ambiguity about this policy. When directly pressed on sub-account transfers, AWS responded with unequivocal language:

"The policy would expand to the 'sub account transfer' use case. The purchased RI/SP will need to be used by the intended end customer and its affiliates. If they are sharing with end customers that are not affiliates then it would be in violation of the policy."

In short, this is a direct contractual prohibition with clear enforcement implications. The only exception applies to multi-year agreements signed before June 1, 2025, which can continue until expiration under an attestation process. No new sub-account transfer arrangements are permitted.

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How to Spot If Your Vendor Is Using Banned Practices

Review your AWS Organization immediately for these warning signs:

• Mystery accounts. Look for AWS accounts you didn't request or create, especially those with little to no actual workload or consumption. These "shell accounts" often exist solely to house vendor-owned commitments.
• Vendor-controlled account details. Check root email addresses and account names. If they clearly belong to your optimization vendor rather than your company, you're likely seeing sub-account transfers in action.
• Unexplained discount fluctuations. Monitor your AWS billing for discounts that appear and disappear suddenly, particularly if these changes align with when your vendor claims to be "optimizing" your setup.
• Lack of transparency. If your vendor provides vague answers when you ask where commitments are purchased, who legally owns them or the accounts they’re in, or how they're applied to your accounts, they may be hiding prohibited practices.
• Commitment visibility issues. You should be able to see all commitments directly in your AWS Billing Console. If commitments appear to benefit your workloads but aren't visible in your own accounts, investigate immediately.

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How CFOs Can Take Action

1. Demand direct ownership. Insist that all AWS commitments be purchased directly in accounts your company owns and controls. This ensures legal ownership and eliminates dependency on vendor account shuffling.
2. Require full transparency. Your vendor should provide complete visibility into where commitments are purchased, how they're applied, and who maintains legal ownership. Any reluctance to provide this information is a red flag.
3. Validate AWS compliance. Contact your AWS account team directly to confirm your current optimization setup complies with the June 2025 policy changes. AWS can provide definitive guidance on your specific situation.
4. Partner with a compliant optimization provider. Cloud Capital delivers the same level of savings vendors once promised, without the policy risk. Our model ensures commitments live in your accounts, under your control, with transparent governance that stands up to AWS scrutiny and investor expectations.

By taking these steps, you eliminate compliance risk and strengthen your credibility with AWS, your board, and your investors, all of whom are scrutinizing how you govern one of your largest operating expenses.

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The Bottom Line

AWS's message is clear: sub-account transfers violate current Terms of Service. Vendors continuing to use this approach are exposing their clients to contractual violations, financial uncertainty, and potential service disruptions.

Growth-stage SaaS companies can't afford these risks during critical scaling phases. Your AWS optimization strategy must deliver genuine savings through compliant practices that protect both your bottom line and your relationship with AWS.

Cloud Capital helps CFOs take control of commitments in a compliant, financially disciplined way. Talk to us about how to protect your company while delivering predictable, compliant cloud savings.

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