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US sanctions causing Microsoft problems in Russia

by on22 January 2018


Two of Microsoft’s official Russian distributors have imposed restrictions on sales of Microsoft software to more than 200 Russian companies following new US sanctions.

The moves by the Russian distributors show how more stringent restrictions that came into force on November  28 are starting to bite.

The new measures cut the duration of loans that can be offered to Russian financial firms subject to sanctions to 14 days from 30 days and 60 days from 90 days for Russian energy companies on the US sanctions list.

According to Reutersone of the two Microsoft distributors, a Russian company called Merlion, said in its notification to partners that all sanctioned buyers of Microsoft licences must pay within tight deadlines, or even pay upfront in some cases.

The second distributor, RRC, said in its notification that “serious restrictions are being introduced” on Microsoft orders from firms subject to US sanctions.

Both Merlion and RRC cited rules stemming from the new package of U.S. sanctions - signed into law on Aug. 2 for Russia’s involvement in Ukraine and cyber attacks - as the reason for the additional restrictions.

Microsoft said in a statement: “Microsoft has a strong commitment to complying with legal requirements and has robust processes around the world to help ensure that our partners comply as well.”

The guidance from the Treasury’s Office of Foreign Assets Control (OFAC) states that US firms can conduct transactions with companies on the sanctions list as long as the payment terms do not exceed the permitted loan duration.

“If a US person believes that it may not receive payment in full by the end of the relevant payment period, the U.S. person should contact OFAC to determine whether a license or other authorisation is required”, it said.

Microsoft lists nine other official distributors of its main software products in Russia in the same category of partner companies as RRC and Merlion. One, Softline, declined to comment on whether it had introduced stricter payment rules. The others did not respond to Reuters requests for comment.

Software produced by Microsoft had been acquired by state organisations and firms in Russia and Crimea, despite sanctions barring US-based companies from doing business with them.



Last modified on 22 January 2018
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