The U.S. Department of the Treasury's Office of Foreign Assets Control (OFAC) published on October 27, 2026 an enforcement release and a settlement agreement with Extreme Networks, Inc. for $1,529,685, for nine apparent violations of section 589.201 of the Ukraine-/Russia-Related Sanctions Regulations, 31 C.F.R. part 589. US exporters of networking hardware and software, US parents of affiliates selling into Russia or other sanctioned markets, US buyers of foreign customer contracts or distributor books, and third-party distributors that issue end-user statements for OFAC screening must immediately screen acquired customers and ongoing orders for 50 percent ownership by a blocked person, and stop the export when the named end user does not match the delivery address, email domain or website, or OFAC can settle an egregious voluntary self-disclosure at up to one-half of the statutory maximum under the Enforcement Guidelines, as it did here for $1,529,685, and the Department of Justice can resolve the same conduct in parallel.
OFAC found the case egregious and voluntarily self-disclosed. The base penalty under 31 C.F.R. part 501, appendix A, is $1,699,650 and the settlement is $1,529,685. The National Security Division the same day announced a first near-miss non-prosecution agreement, $975,721.84 in total, in its October 27, 2026 release.
- Authority : Office of Foreign Assets Control, coordinated with the Department of Justice
- Entity : Extreme Networks, Inc.
- Measure and amount : civil settlement of $1,529,685 (base penalty $1,699,650)
- Legal basis : 31 C.F.R. § 589.201; 50 percent rule at 31 C.F.R. § 589.411
- Decision date : October 27, 2026 (release and settlement agreement)
- Official source : OFAC enforcement release, October 27, 2026
What happened
In March 2018 Extreme Networks Rus LLC bought contracts naming Joint Stock Company Moskovskiy Mashinostroitelniy Zavod Avangard (MMZA), majority owned by Almaz-Antey (designated July 16, 2014, Executive Order 13661), so MMZA was blocked under 31 C.F.R. § 589.411 before its own June 28, 2022 designation. Nine US exports followed through March 2022. Seven orders named Dmitrovskiy Experimental Mechanical Plant (DEMZ) while listing MMZA emails or its Moscow office. In October and November 2020 a distributor sent MMZA's website twice, then DEMZ's site and a DEMZ end-user statement.
The breach
OFAC states: "Ultimately, between September 2018 and March 2022, Extreme dealt in property in which a blocked person held an interest on nine occasions when it exported hardware and software from the United States to MMZA, in apparent violation of § 589.201 of the Ukraine-/Russia-Related Sanctions Regulations, 31 C.F.R. part 589." 31 C.F.R. § 589.201 is that prohibition. OFAC weighed red flags and the benefit to an S-300 and S-400 supplier against a clean five-year record and later customer screening on acquisitions.
Who else is in the same regime
The same provisions reach other US exporters of networking hardware and software, US parents whose affiliates sell into Russia, buyers of a foreign customer book, and distributors that issue the end-user statement. Extreme's US team screened the nine orders and still approved them. The DEMZ statement closed the file after the websites had pointed to MMZA.
What to check now
- Screen customers taken in an acquisition for 50 percent ownership by a blocked person, including persons blocked only by 31 C.F.R. § 589.411.
- Stop the export when the named end user does not match the delivery address, the email domain or the website.
- Halt an order when a later end-user statement contradicts an earlier website, address or email.
- Review portal registrations that pair a cleared company name with another entity's email domain, and activity reports that name a blocked customer.
