Microsoft software sales in Russia limited by new US sanctions

Seems as though the tit for tat sanctioning between the United States and Russia may be hurting more than international perceptions of its respective leaders. Thanks in large part to the back and forth posturing of the US and Russia, Microsoft has found itself restricted to whom it can sell its software to in the area.

According to a report from Business Insider citing the Moscow Reuters as a source, Microsoft is now being handed down restrictions from official distributors in Russia as to who and where it can sell its software.

Two of Microsoft’s official distributors in Russia have imposed restrictions on sales of Microsoft software to more than 200 Russian companies following new U.S. sanctions, according to notifications circulated by the distributors.

Not only are there restrictions being placed on who Microsoft can sell its software to in Russia but the restrictions come with their own heavy-handed restrictions about how and deadlines accompanying purchase to make sure Microsoft receives payment.

The notification from Microsoft distributor Merlion dated Nov. 29, the day after the new lending rules come into force, said orders would only be fulfilled for financial sector buyers once it had confirmation full payment had been received.

For the defense sector, it said orders would be fulfilled only if partners confirmed payment would be made within 30 days of the software license being activated. For energy sector clients, confirmation of payment within 60 days was required.

“If we do not receive from you documents confirming payment on orders from the defense and energy sectors, the order could be viewed by the vendor as not complying with the processing procedure and rejected,” Merlion’s notification said.

RRC did not spell out the new restrictions in its notification, sent by email last month to its partners.

“In the event that you have buyers from the following sectors of the economy (financial, defense, energy) and they are in the sanctions list, you are requested IN ADVANCE to contact your RRC manager for further instructions.”

“In connection with this, serious restrictions are being introduced on the placing of, and payment for, orders for Microsoft products … placed by these buyers (and also their subsidiaries and affiliated companies),” the notification said.

With restrictions tightening, now would be a perfect time for Russian companies or municipalities to take advantages in gaps of issuance to willfully forego payment of Microsoft software citing sanctions as a convenient deterrent.

While it’s an unfortunate position to be in, Microsoft appears confident that it is doing everything it can to salvage and maintain a working relationship with its partners and buyers without committing to more blatant impositions such chasing civil penalties.

For what’s worth, it seems a handful of companies are distancing themselves from Russian entities on the US blacklist as many may assume this warring of sanctions is a passing phase.