Exclusive: Despite sanctions, Russian organizations acquire Microsoft software

MOSCOW (Reuters) – Software produced by Microsoft Corp has been acquired by state organizations and firms in Russia and Crimea despite sanctions barring U.S-based companies from doing business with them, official documents show.

The acquisitions, registered on the Russian state procurement database, show the limitations in the way foreign governments and firms enforce the U.S. sanctions, imposed on Russia over its annexation of the Crimea peninsula from Ukraine in 2014.

Some of the users gave Microsoft fictitious data about their identity, people involved in the transactions told Reuters, exploiting a gap in the U.S. company’s ability to keep its products out of their hands.

The products in each case were sold via third parties and Reuters has no evidence that Microsoft sold products directly to entities hit by the sanctions.

“Microsoft has a strong commitment to complying with legal requirements and we have been looking into this matter in recent weeks,” a Microsoft representative said in an emailed response to questions from Reuters.

“We have robust trade compliance processes around the world to help ensure that our partners comply with all conditions including immediate halting of suspected improper sales by partners, and strong measures to try to prevent banned customers from accessing and using our products and services.”

All state organizations and state firms are obliged to disclose purchases they make on the procurement database. People involved in five of the transactions confirmed to Reuters the software had been acquired.

The Reuters review of the database found state entities in Russia and Crimea that are subject to sanctions have acquired more than 5,000 Microsoft products worth about 60 million rubles ($1.03 million).

The sum is relatively small but such software is vital for many firms and organizations in Russia and Crimea to operate. The database also does not include private companies, so the scale of the problem could be much…

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