Despite Sanctions, Groups in Russia Acquiring Microsoft Products

Software that Microsoft Corp produced was acquired by state companies and organizations in Russia and Crimea even though sanctions bar companies based in the U.S. from conducting business with the two governments, show official documents.

The acquisitions of software, registered on the state procurement database in Russia, bring to light the limitations of how foreign firms and governments enforce the sanctions by the U.S. that were imposed in 2014 on Russia over the annexation it made from Ukraine of the Crimea peninsula

Some users gave fictitious data to Microsoft about what their identity was, said people who were involved in such transactions, exploiting the gap in Microsoft’s ability to keep products out of Russian hands.

These products in each case had been sold through a third party and there does not exist any evidence Microsoft sold any products directly to the entities that were under sanctions by the U.S.

A spokesperson for Microsoft said the company maintained a strong commitment to comply with the legal requirements and has been investigating the matter recently.

All government organizations and firms must disclose their purchases made on Russia’s procurement database. People who have had involvement with some of the transactions confirmed that the software was acquired.

A review by investigators of the database found that state entities in both Crimea and Russia subject to U.S. sanctions acquired over 5,000 products made by Microsoft with a value of over 60 million rubles or $1.03 million.

The total is quite small but that software is critical for many companies and groups in Crimea and Russia for their operations. The database does not include any private businesses, so the full scale of this problem might be far bigger.

Amongst entities hit by sanctions that purchased products made by Microsoft, is Almaz-Antey, which makes the surface to air missile BUK. Prosecutors in Holland said that a BUK missile is what brought down the Malaysian Airline jet over the eastern part of Ukraine during July of 2014, though Russia had denied its military forces shot the plane down.

Other buyers of Microsoft products that appeared on the database included Glavosexpertiza, a state owned design company that is involved in working on a bridge linking Russia and Crimea as well as the Krym health spa located in Crimea owned by the defense ministry of Russia.

Arms maker Almaz-Antey has not commented on its purchases, and Russia’s defense ministry health spa did not comment when one was requested.

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