US, Microsoft reach settlement over tech firm's sanctions violations

Microsoft has agreed to remit about $3 million to settle its potential civil liability.

WASHINGTON (Reuters) – The United States and Microsoft Corp reached a settlement on Thursday over the tech firm's apparent violations of sanctions and export controls, which it disclosed voluntarily, the government and the company said.

Microsoft has agreed to remit about $3 million to settle its potential civil liability for more than 1,300 apparent sanctions violations in relation to restrictions on Cuba, Iran, Syria and Russia involving the export of services or software from the US to sanctioned jurisdictions, the US Treasury Department said in a statement.

The Treasury Department added that Microsoft's conduct was "non-egregious and voluntarily self-disclosed."

A majority of the violations, which took place between 2012 and 2019, involved blocked Russian entities or persons located in the Crimea region of Ukraine, and occurred as a result of Microsoft's failure to identify and prevent the use of its products by prohibited parties, the Treasury Department said.

Russia annexed Crimea in 2014 before launching a full scale invasion of Ukraine in early 2022.

In an emailed statement to Reuters, Microsoft acknowledged failures in its sanctions compliance and said it had cooperated with the probe and was pleased with the settlement.

"Microsoft takes export control and sanctions compliance very seriously, which is why after learning of the screening failures and infractions of a few employees, we voluntarily disclosed them to the appropriate authorities," a company spokesperson said.

The causes of sanctions violations included a lack of complete or accurate information on the identities of the end customers for Microsoft products, the Treasury Department said, adding that there were shortcomings in Microsoft's restricted-party screening.