Full Breakdown
Extreme Networks Pays $2.5 Million for Sanctions Violations Involving Russian Missile Maker
By Drooid · · How we work
In this breakdown
01
Settlement Overview
Extreme Networks, a Nasdaq-listed provider of artificial-intelligence and cloud networking solutions, agreed to pay roughly $2.5 million to U.S. authorities for violating sanctions on MMZ Avangard, a Russian manufacturer of antiaircraft missiles for the S-300 and S-400 systems. The settlement was announced by the Justice Department and the Treasury Department’s Office of Foreign Assets Control (OFAC).
02
Background on the Restricted Party
MMZ Avangard produces missiles used in Russia’s S-300 and S-400 air-defence platforms. U.S. sanctions prohibit the export of U.S. technology that could support the development or production of such weapons. Extreme Networks supplied computer equipment and services to the firm, thereby breaching those restrictions.
03
Penalty Breakdown
- Criminal component: More than $975,000 split evenly between forfeiture and a criminal fine under a non-prosecution agreement with the Justice Department.
- Civil component: Over $1.5 million paid to OFAC in a separate civil settlement.
The Justice Department determined that Extreme Networks did not voluntarily disclose the misconduct, noting that the company informed investigators only after learning the conduct would appear in a news report in October 2022. OFAC’s filing, however, described the company’s self-report as “voluntary” while characterizing the violations as “egregious.” Prosecutors classified the case as a “near miss” under a new Justice Department policy, which resulted in a reduced criminal fine.
04
Company Response
A company spokesperson said Extreme Networks had conducted a comprehensive review of the misconduct and implemented “market-leading” compliance policies. The firm admitted the violations in its settlements with both the Justice Department and OFAC.
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Broader Implications
The settlement underscores heightened enforcement of U.S. sanctions on technology transfers to Russian defense firms. By applying the “near miss” policy, regulators signaled that cooperation and timely reporting can mitigate penalties, while still imposing substantial financial consequences for breaches. The case serves as a cautionary example for multinational technology firms navigating complex export-control regimes.