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Microsoft to pay $3 million in settlement over Russian sanctions
https://www.whatjobs.com/news/usa/us-business-news/microsoft-to-pay-3-million-in-settlement-over-russian-sanctions
By Nithya Bose in US business news, posted April 7, 2023
Microsoft will pay $3 million in fines for breaking US sanctions and export controls on Russia and other countries.
The US Treasury and Commerce Departments found that the firm's software and services fell into the hands of banned firms and people in Ukraine's Crimea area.
Regulators said a joint settlement was agreed with Microsoft over the alleged breaches of US sanctions, which the tech giant disclosed voluntarily.
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The violations from July 2012 to April 2019 precede President Vladimir Putin's major Russian invasion of Ukraine in 2022.
The US and its allies have greatly increased economic sanctions as a reaction to the invasion.
The authorities highlighted that most of the purported violations involved banned Russian entities in Crimea, with a few tied to blacklisted firms in Cuba, Iran, and Syria.
The settlement says Microsoft also reportedly broke laws that prevent sensitive technologies from reaching US adversaries.
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A company spokesman said: “Microsoft takes export control and sanctions compliance very seriously, which is why after learning of the screening failures and infractions of a few employees, we voluntarily disclosed them to the appropriate authorities.”
The Treasury’s Office of Foreign Assets Control (OFAC) says the breaches resulted from Microsoft's third-party distribution and resale programs.
It adds that Microsoft utilized an indirect reselling strategy to generate sales leads and negotiate bulk purchases with end customers.
The claimed violations occurred after the firm failed to gather accurate information about some of these end users.
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Employees at Microsoft's Russian subsidiary appear to have willfully evaded the company's screening controls.
OFAC said these actions were taken to keep other Microsoft affiliates from discovering the identity of the final customers.
The company’s spokesman said the workers involved in the misconduct had faced disciplinary action, including firing.
OFAC found that Microsoft sold over $12 million in products and services to blacklisted parties.
Source: The Wall Street Journal
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