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Microsoft was hit with a $3 million fine for breaking US sanctions on Russia

The US government issued a number of sanctions after Russia annexed Crimea in 2014 to prevent American businesses from transacting business with sanctioned people and entities. Microsoft, on the other hand, has recently run into issues with the US Treasury and Commerce Departments for suspected violations of US sanctions on Russia and other nations. The agency consequently imposed a fine of over $3 million on Microsoft for its products and services reaching blacklisted businesses and individuals in the Crimean area of Ukraine.

As per the report, the violations have been recorded between July 2012 and April 2019, thus preceding the Russian invasion of Ukraine. Microsoft has been accused of using indirect resale models in Russia. Such models were utilized to acquire sale leads and bargain bulk sales with end buyers. In simple words, Microsoft has sold its products to businesses that weren’t blacklisted, they in turn sold them to the blacklisted entities.

These violations are a result of the company’s failure to obtain precise information about some of the potential end-users. Moreover, these infractions may have also been caused by Microsoft employees in Russia deliberately evading the company’s screening systems. Let us understand this by a simple example, one subsidiary of Stroygazmontazh, a Russian infrastructure company was refused as a potential client back in 2014 due to blacklisting. However, the company was successful in acquiring Microsoft products by utilizing a penname arranged by the company’s employees in Russia.

Microsoft reported the violations on its own

These violations are a disdain against US sanctions. However, the Treasury Department recognized and appreciated the fact that the company self-discovered violations carried out investigations, and self-reported them to the government.  In addition to this, the company has made changes to its execution procedures and measures.

A Microsoft spokesperson said Microsoft takes export control and sanctions compliance very seriously. As a result, after learning of the screening shortcomings and violations of a few employees, we voluntarily submitted them to the proper authorities.