April 7 (UPI) — Microsoft has agreed to pay some $3.3 million in fines for violating U.S. export controls and sanction laws over selling software and providing services to blacklisted companies and individuals primarily in Russia, but also in Cuba, Iran and Syria.
The agreement between the U.S. software giant and the United States was announced Thursday by the Treasury Department, which said the agreement settles Microsoft’s potential civil liability for committing 1,339 violations of multiple Office of Foreign Assets Control programs between July 2012 and April 2019.
The majority of the violations involved blocked Russian companies and individuals located in Crimea, which Moscow illegally annexed from Ukraine in 2014. Treasury officials said the violations were the result of Microsoft’s failure to identify and prevent the use of its products by those blocked by the United States.
Microsoft had voluntarily disclosed the violations to the U.S. government. U.S. officials said that the violations were committed by foreign subsidiaries of Microsoft that had employed third-party distributors and resellers to sell its software. Total value of the related sales and services was a little more than $12 million.
According to the notice of the agreement, Microsoft committed more than 1,250 violations of Ukraine/Russia-related sanctions regulations, 50 related to Cuba restrictions, 30 connected to Iran and a handful concerning Syria.
“U.S. companies will be held accountable for the activities of their foreign subsidiaries,” Assistant Secretary for Export Enforcement Matthew Axelrod said in a statement.
Andrea Gacki, director of the OFAC, added that the agreement underscores “the risks technology companies may face when engaging through foreign subsidiaries, distributors and resellers and the importance of maintaining effective controls.”
The violations by Microsoft occurred prior Russia’s full-scale invasion of Ukraine last year, which attracted a plethora of sanctions to be enforced against Moscow by the United States and its allies.