Cisco Dodged Sanctions Barring Russian Trade – Report

Altered records in an attempt to provide equipment to Russian military and security services, according to a report on BuzzFeed News.

Mitch Wagner, Executive Editor, Light Reading

May 21, 2015

2 Min Read
Cisco Dodged Sanctions Barring Russian Trade – Report

Employees at Cisco "altered sales records and booked deals under a false customer name" in order to "dodge sanctions and provide equipment to Vladimir Putin's military and security services," according to a lengthy BuzzFeed report published Wednesday.

The intent was to hide true customers behind "more innocuous sounding straw buyers," including in "at least one case … the feared FSB, the successor to the Soviet-era KGB," according to the report.

BuzzFeed says that Cisco Systems Inc. (Nasdaq: CSCO) top officials "vehemently denied the allegations." A Cisco spokesman told Light Reading: "We have a sterling 30-year record of compliance with export and sanctions rules around the world, and are in complete compliance with the US and EU sanctions on Russia."

He added, "I'll go further to say that we received a large number of questions from the outlet before their report was published. Given our compliance track record, we treated these very seriously, took our time to look into them, and reported back to them our findings in multiple, detailed conversations. Everything we saw confirmed for us that Cisco is in complete compliance with the US and EU sanctions."

Cisco officials "didn't dispute the authenticity" of internal emails and spreadsheets obtained by BuzzFeed News, but said incorrect buyer names were "innocent and harmless errors," according to BuzzFeed. When records were changed, the intent was only to make them more accurate.

The US and European Union imposed the sanctions last year after Russia annexed Crimea. They prohibit Western companies from selling "dual-use technology" -- civilian technology that could also have military applications -- to "military end-users," BuzzFeed says. That definition includes much of Cisco's equipment, and the company canceled deals worth $1.7 million in early October.

If this story blows up big -- whether true or not -- it would be a big problem for Cisco, leading to damaged reputation and possible sanctions. And it comes at a delicate time, as longtime CEO and chairman John Chambers plans to step down in July and the company is navigating a dangerous transition from selling equipment to partnering with companies to achieve business outcomes using networking technology, including the Internet of Things and the cloud. (See Chambers's Legacy: A Resurgent Cisco .)

— Mitch Wagner, Circle me on Google+ Follow me on TwitterVisit my LinkedIn profileFollow me on Facebook, West Coast Bureau Chief, Light Reading. Got a tip about SDN or NFV? Send it to [email protected].

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About the Author(s)

Mitch Wagner

Executive Editor, Light Reading

San Diego-based Mitch Wagner is many things. As well as being "our guy" on the West Coast (of the US, not Scotland, or anywhere else with indifferent meteorological conditions), he's a husband (to his wife), dissatisfied Democrat, American (so he could be President some day), nonobservant Jew, and science fiction fan. Not necessarily in that order.

He's also one half of a special duo, along with Minnie, who is the co-habitor of the West Coast Bureau and Light Reading's primary chewer of sticks, though she is not the only one on the team who regularly munches on bark.

Wagner, whose previous positions include Editor-in-Chief at Internet Evolution and Executive Editor at InformationWeek, will be responsible for tracking and reporting on developments in Silicon Valley and other US West Coast hotspots of communications technology innovation.

Beats: Software-defined networking (SDN), network functions virtualization (NFV), IP networking, and colored foods (such as 'green rice').

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