Microsoft fined millions for selling software to Russian firms

Microsoft head quarters in France
(Image credit: HJBC / Shutterstock)

Microsoft has agreed to pay in excess of $3 million to settle a potential civil liability for a believed 1,339 sanction violations that saw it sell products and services to individuals and companies in countries like Russia.

The more than 1,300 cases took place between July 2012 and April 2019 and saw Microsoft allegedly selling software licenses, activated software licenses, and related services from its US and Ireland servers to “Specially Designated Nationals” and blocked users in Cuba, Iran, Syria, Russia, and the Crimea region of Ukraine.

Following a Bureau of Industry and Security (BIS) settlement of $624,013, Microsoft and its Ireland and Russia subsidiaries agreed to a settlement worth $2.98 million with The Office of Foreign Assets Control (OFAC) of the US Department of the Treasury. BIS later issued a $276,382 credit, bringing Microsoft’s net settlement to almost $3.3 million for both bodies.

Microsoft selling to banned Russian companies

Over the course of nearly seven years, the tech giant reportedly sold $12.1 million worth of services to banned customers.

Accounting for almost 94% of all instances were the 1,252 Russian sales. A further 54 in Cuba, 30 in Iran, and 3 in Syria also occurred.

Despite a maximum fine of more than $404.6 million, the OFAC decided that less than 1% of this would be sufficient given Microsoft’s voluntary self-disclosure of the apparent violations and the non-egregious nature of the case despite the “reckless disregard for US sanctions.”

It’s unclear whether Microsoft has reconsidered its business practices following Russia’s invasion of Ukraine, however Russian media alleged that Microsoft (and Intel) had resumed some business in the country earlier this year.

A Microsoft spokesperson told TechRadar Pro

"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. We cooperated fully with their investigation and are pleased with the settlement."

Craig Hale

With several years’ experience freelancing in tech and automotive circles, Craig’s specific interests lie in technology that is designed to better our lives, including AI and ML, productivity aids, and smart fitness. He is also passionate about cars and the decarbonisation of personal transportation. As an avid bargain-hunter, you can be sure that any deal Craig finds is top value!