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1. Identify the principals with inline policies:
   • Run the following AWS CLI command to list all IAM users with inline policies:
     aws iam list-users --query 'Users[?not_null(UserPolicyList)].[UserName, UserPolicyList[?PolicyName].PolicyName]' --output table
     
   • Run the following AWS CLI command to list all IAM roles with inline policies:
     aws iam list-roles --query 'Roles[?not_null(RolePolicyList)].[RoleName, RolePolicyList[?PolicyName].PolicyName]' --output table
     
2. Create managed policies for the inline policies:
   • For each IAM user with inline policies, create a managed policy using the following AWS CLI command:
     aws iam create-policy --policy-name <policy-name> --policy-document file://<policy-document.json>
     
     Replace <policy-name> with a suitable name for the policy and <policy-document.json> with the JSON document containing the inline policy.
   • For each IAM role with inline policies, create a managed policy using the same AWS CLI command.
3. Attach the managed policies to the principals:
   • For each IAM user, attach the managed policy using the following AWS CLI command:
     aws iam attach-user-policy --user-name <user-name> --policy-arn <policy-arn>
     
     Replace <user-name> with the IAM user’s name and <policy-arn> with the ARN of the managed policy.
   • For each IAM role, attach the managed policy using the same AWS CLI command.
4. Verify the remediation:
   • Run the following AWS CLI command to list all IAM users and their associated managed policies:
     aws iam list-users --query 'Users[].[UserName,join(`, `,UserPolicyList[?PolicyName].PolicyName)]' --output table
     
   • Run the following AWS CLI command to list all IAM roles and their associated managed policies:
     aws iam list-roles --query 'Roles[].[RoleName,join(`, `,RolePolicyList[?PolicyName].PolicyName)]' --output table
     

1. Identify the principals with inline policies:
   • Use the AWS Identity and Access Management (IAM) service to list all the IAM users, groups, and roles.
   • For each principal, check if they have any inline policies attached.
2. Create managed policies:
   • Analyze the inline policies and identify their permissions and resources.
   • Create managed policies in AWS IAM using the boto3 Python library.
   • Assign the appropriate permissions and resources to the managed policies.
3. Detach inline policies:
   • For each principal with inline policies, use the boto3 library to detach the inline policies.
   • Keep track of the detached inline policies to later attach them as managed policies.
4. Attach managed policies:
   • For each principal, attach the corresponding managed policies created in step 2 using the boto3 library.
   • Ensure that the managed policies provide the necessary permissions and resources required by the principals.
5. Update your code or infrastructure-as-code templates:
   • If you have any code or infrastructure-as-code templates that reference the inline policies, update them to use the managed policies instead.
   • Replace the inline policy references with the corresponding managed policy ARNs.
6. Test and validate:
   • Test the remediated IAM configurations thoroughly to ensure that the intended permissions and resources are still accessible.
   • Validate the permissions and resources for each principal to ensure they align with the desired access levels.
7. Monitor and enforce best practices:
   • Regularly monitor your AWS IAM configurations to identify any new instances of principals with inline policies.
   • Enforce best practices by using managed policies instead of inline policies wherever possible.

resource "aws_iam_user" "example" {
  name = "IAM_USER_NAME" # replace with the IAM user name
}

# New reusable managed policy that replaces the old inline policy JSON
resource "aws_iam_policy" "user_permissions" {
  name        = "IAM_MANAGED_POLICY_NAME" # e.g. "app-user-permissions"
  description = "Managed policy replacing inline policy on IAM user IAM_USER_NAME"

  policy = jsonencode({
    Version = "2012-10-17"
    Statement = [
      # Copy the statements from the existing inline policy here
      {
        Sid      = "STATEMENT_ID"
        Effect   = "Allow"
        Action   = [
          "SERVICE:ACTION_1",
          "SERVICE:ACTION_2",
        ]
        Resource = "*"
      }
    ]
  })
}

# Attach the managed policy to the IAM user
resource "aws_iam_user_policy_attachment" "user_attachment" {
  user       = aws_iam_user.example.name
  policy_arn = aws_iam_policy.user_permissions.arn
}

# (Existing inline policy to be removed from Terraform)
# Delete or comment out any aws_iam_user_policy resources for this user,
# e.g.:
#
# resource "aws_iam_user_policy" "inline" {
#   user   = aws_iam_user.example.name
#   policy = jsonencode({ ... }) # REMOVE this resource to eliminate inline policy
# }

• aws_iam_user_policy resources for that user being destroyed.
• A new aws_iam_policy being created.
• A new aws_iam_user_policy_attachment being created.