Microsoft Faces a $3 Million Fine for Selling Software to Russia

Tyler Cross
Tyler Cross Senior Writer
Tyler Cross Tyler Cross Senior Writer

Microsoft, the massive tech company, sold software to sanctioned countries, including Russia, Cuba, Syria, and Iran, from 2012 to 2019. In response, the U.S. Government has levied a roughly $3 million fine on Microsoft.

While that’s only a tiny amount for the multi-billion dollar company, The US Treasury is giving Microsoft leeway because of Microsoft’s role in the investigation process. Microsoft was the one to notice the incident, investigate it, and report it to the US government as well — also while taking significant security measures to prevent it from happening again.

“The settlement amount reflects OFAC’s determination that the conduct of the Microsoft Entities was non-egregious and voluntarily self-disclosed, and further reflects the significant remedial measures Microsoft undertook upon discovery of the apparent violations,” the Treasury said in a statement.

Microsoft employees in sanctioned countries like Russia were deliberately attempting to circumvent their sanctions and obtain Microsoft products. In one story, Microsoft rejected a Russian oil company, but Russian employees were able to bypass the rejection for a short while before being caught and fired.

“Certain Microsoft Russia employees successfully used a pseudonym for that subsidiary to arrange orders on behalf (of the company),” the US Treasury said.

OFAC believes that stories like this “underscores the persistent efforts of actors in the Russian Federation to evade U.S. sanctions.”

However, it’s not just employees in Microsoft Russia. Microsoft and Microsoft Ireland had also failed to properly monitor which third parties were responsible for buying Microsoft products and services. Essentially, legitimate companies would purchase Microsoft products and then sell those products to sanctioned individuals or entities that aren’t able to buy them normally.

“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,” said spokesman David Cuddy.

By the end, Microsoft had netted about $12 million from these purchases before reporting it to the US government and getting fined.

“We cooperated fully with their investigation and are pleased with the settlement,” Microsoft said.

About the Author
Tyler Cross
Tyler Cross
Senior Writer

About the Author

Tyler is a writer at SafetyDetectives with a passion for researching all things tech and cybersecurity. Prior to joining the SafetyDetectives team, he worked with cybersecurity products hands-on for more than five years, including password managers, antiviruses, and VPNs and learned everything about their use cases and function. When he isn't working as a "SafetyDetective", he enjoys studying history, researching investment opportunities, writing novels, and playing Dungeons and Dragons with friends."