Sales Of Microsoft Products In Russia Hampered By Sanctions

Reports indicate that the sanctions placed on some Russian firms by the United States are hampering sales of Microsoft products. According to the reports two of the official distributors of the Redmond, Washington-based software maker in Russia are restricting the sales of Microsoft products to over 200 Russian firms which are on the sanctions list.

The tougher sanctions which took effect last year on November 28 have reduced the loan duration of Russian financial firms which are on the sanctions list from 30 days to 14 days. For Russian energy firms the loan duration has been reduced from 90 days to 60 days.

Financial restrictions

Before the new tougher sanctions the restrictions were mainly affecting western banks offering loans to Russian firms. With the new short financing periods suppliers doing business with Russian clients might start feeling the pinch too. In Russia suppliers sometimes have to wait months before they can get paid for services and goods delivered.

Merlion, one of the distributors of Microsoft in Russia, demanded that all those seeking to buy Microsoft licenses and are on the sanctions list must pay for them within a short period. In some cases they will be required to pay before delivery.

“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,” said Merlion in a notification to clients.

SDN and SSI

RRC, another Microsoft official distributor, also warned of the introduction of serious restrictions. Both distributors said this was as a result of the sanctions which were signed into law last year on August 2. The sanctions were imposed following the annexation of Crimea from Ukraine by Russia. Cyber attacks linked to Russia were also another reason given for the sanctions.

There are two lists with regards to sanctions imposed on Russia by the United States and this is the SDN – Specially Designated Nationals and the SSI – Sectoral Sanctions Identifications. Under the SDN list entities that are based in the United States are prohibited from conducting business with Russian firms appearing on it.

The SSI list on the other hand covers Russian firms as well as their subsidiaries numbering 224. Most of these are in the defense, energy and banking sectors and the sanctions are mainly financial restrictions. Prominent Russian firms affected under the SSI list include Novatek, a producer of natural gas, oil giant Rosneft and the biggest lender in the country, Sberbank.

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