US sanctions curb Microsoft sales to Russian firms

Two of Microsoft’s official distributors in Russia have imposed restrictions on sales of Microsoft software to more than 200 Russian companies following new US sanctions, Reuters reports, citing notifications by several firms.

While much of the focus around US sanctions has been on ways they are being skirted, the moves by the Russian distributors show how tougher 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 to 60 days from 90 days for Russian energy companies on a US sanctions list.

Previously, the restrictions had mainly affected Western banks lending to Russian firms but with such short financing periods, swathes of companies supplying goods and services to Russian clients fear they could fall foul of the rules too.

It is routine in Russia for suppliers to wait weeks or even months to get paid after submitting invoices for goods and services.

Some Western firms have been advised by lawyers that the US Treasury Department could, in theory, take the view this constituted financing in violation of the sanctions, according to several people involved in the discussions.

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

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