The Russian daily Kommersant reported today that White House sanctions against Russia cost Cisco and Juniper Networks $170 million in lost business since spring. The sanctions bar sales of “dual-use” technologies to Russian state agencies.
In March, the US Commerce Department’s Bureau of Industry and Security (BIS) announced that it had begun denying licenses to export certain hi-technology products to Russia, and that it would revoke any current export licenses for any technology products that could wind up helping Russia’s military structures or its takeover of Crimea. According to Kommersant, the BIS approved 1832 export licenses to Russia in 2013, worth some $1.5 billion.
Russia reportedly imports 90% of its telecommunications equipment, with Cisco as the main supplier. Kommersant spoke to industry people close to Cisco and resellers, who told the newspaper that Cisco is expected to lose its dominant position in Russia to China’s Huawei and France’s Alcatel-Lucent.
Just weeks after the BIS announced its ban on export licenses to Russia, Reuters reported that the Department of Justice and the SEC were investigating Cisco for violating the Foreign Corrupt Practices Act after a whistleblower exposed Cisco’s inaccurate bookkeeping on its sales to Russia. The Foreign Corrupt Practices Act makes it illegal for companies to bribe foreign officials, and to keep false accounting records.