Microsoft reached a settlement over its violations of sanctions and export controls, which it disclosed without resistance, to the government, Microsoft said today. The amount is $3 million for more than 1,300 apparent sanctions violations in relation to restrictions on Cuba, Iran, Syria, and Russia. This was said by the U.S. Treasury Department.
Microsoft Sanctions
There wasn't any resistance from Microsoft in regard to these violations, and I think this was because Microsoft is only paying $3 million. That is a drop of water in the entire cash hoard that Microsoft has, so of course they are not going to resist.
Many of these violations happened between 2012 and 2019 and involved blocked Russian entities or persons located in the Crimea region of Ukraine, and happened as a result of Microsoft's failure to identify and prevent the use of its products by those 3rd parties that are prohibited from the U.S. government.
Why the Sanctions?
Russia annexed Crimea in 2014 before it started its invasion of Ukraine in 2022. To annex a piece of land means to add it to your land, so Russia decided that Crimea was going to be part of it in 2014.
Microsoft acknowledged the sanctions compliance and said it has cooperated with this probe and was pleased with the settlement. I think pleased means they are happy they didn't have to pay more of a fine.
Cause of Sanctions
The cause of the sanctions was a lack of complete or accurate information on the end customers for Microsoft products, according to the Treasury Department, and added that there were shortcoming in Microsoft's restricted-party screening.
What this means is that Microsoft didn't prioritize this feature of identifying 3rd parties because it was probably more expensive to do that work than to pay this fine.
Conclusion
This is a small fine for Microsoft, and I don't think Microsoft would have added a better tracking system in its software with such a small fine. If Microsoft knew a $100 million fine was going to happen, you better believe Microsoft would have prioritized some feature work to much better track users of its software.
Do you think this fine should have been more?
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