Cisco bypassed Russia sanctions to continue sales: report

Set up ghost buyers and falsified records to sell to Russian army and security organizations

Cisco reportedly skirted sanctions in order to sell networking equipment to Russia’s military.

In an investigative piece published this week, Buzzfeed alleges Cisco knowingly sold gear through straw companies fronting for Russian government and military institutions in violation of American sanctions. Cisco denies any wrongdoing and any knowledge of the scheme, allegedly perpetrated by its Russian operations, according to Buzzfeed.

Cisco says some of the bogus customer names were errors, Buzzfeed reports.

Cisco’s business in Russia is already under scrutiny for possibly violating the U.S. Foreign Corrupt Practices Act.

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Citing internal documents and inside sources, Buzzfeed says Cisco altered sales records and booked deals under false customer names on order to continue sales to Russian military and security forces. Cisco succeeded in selling equipment to Russia’s FSB – the successor to the KGB – by disguising them as sales to the Russian Chamber of Commerce and Industry of the Russian Federation.

The Chamber of Commerce was used as a “ghost buyer” for sales to banned federal agencies, Buzzfeed reports, but the chamber itself claimed it never bought anything other than office supplies for its own use.

Citing internal company records, Buzzfeed says Cisco booked at least seven deals over six months to sell a total of more than $500,000 worth of equipment such as routers, switches, and servers to the chamber.

In other cases, employees changed the name of the customer from the Ministry of Defense or the Russian space agency to a company in order to disguise the true buyer, Buzzfeed reports.

Cisco has come under fire in the past for sales to governments with strained relations with the U.S. and with its own people.

Despite sanctions that prohibited sales of American technology to Iran, an Iranian mobile operator was able to source equipment from Cisco, HP and Oracle's Sun Microsystems business three years ago. And Cisco has been accused of supplying  gear to China's government for the suppression of Falun Gong practitioners.

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