Microsoft Fined USD3.3 Million for Alleged Violations of US Export Controls, Sanctions Laws
(MENAFN) Microsoft, the US-based global tech giant, has been fined USD3.3 million for alleged violations of US export controls and sanctions laws, according to a joint statement by the Treasury and Commerce departments. The company voluntarily self-disclosed the alleged violations to the Commerce Department's Bureau of Industry and Security (BIS) and the Treasury Department's Office of Foreign Assets Control (OFAC), and cooperated with the joint investigation conducted by BIS and OFAC. Microsoft also took remedial measures after discovering the conduct at issue, which predated the export controls and sanctions imposed in connection with Russia's ongoing war in Ukraine.
BIS imposed an administrative penalty of over USD600,000 on Microsoft's subsidiary, Microsoft Rus LLC, or Microsoft Russia, while the company settled with OFAC and agreed to an almost USD3 million civil penalty to resolve 1,339 violations of sanctions regulations involving Ukraine/Russia, Cuba, Iran, and Syria. Microsoft was given a USD276,000 credit by BIS, contingent upon fulfilling its requirements under the OFAC settlement agreement.
Assistant Secretary for Export Enforcement Matthew S. Axelrod emphasized that US companies would be held accountable for the activities of their foreign subsidiaries. He added that the coordinated resolution demonstrated that BIS and OFAC would work together to ensure the effective enforcement of US export control and sanctions laws worldwide.
According to the Treasury, employees of Microsoft Russia caused another Microsoft subsidiary to enter into or sell software licensing agreements that would allow the transfer or access to software on seven occasions between December 2016 and December 2017. OFAC Director Andrea Gacki noted that Microsoft's case underscored the risks technology companies may face when engaging through foreign subsidiaries, distributors, and resellers.
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