Extreme Networks settles Russia sanctions case for $1.53 million
The US Treasury has reached a $1.53 million settlement with Extreme Networks over nine apparent sanctions violations involving equipment and services supplied to a Russian defence manufacturer linked to the country's S-300 and S-400 missile systems.
WASHINGTON, October 27, 2026 — The Treasury Department's Office of Foreign Assets Control (OFAC) announced that North Carolina-based Extreme Networks Inc., a cloud networking and artificial intelligence solutions provider, agreed to pay $1,529,685 to settle potential civil liability for transactions involving Joint Stock Company Moskovskiy Mashinostroitelniy Zavod Avangard (MMZA).
Between September 2018 and March 2022, Extreme exported networking equipment, software and related services from the United States to MMZA, a Russian defense manufacturer majority-owned by JSC Concern Almaz Antey. Although MMZA was not independently designated until June 2022, it had been subject to US blocking sanctions since 2014 under OFAC's 50 Percent Rule because of its ownership by Almaz Antey, which manufactures air defense systems and missiles.
According to OFAC, Extreme's Russian subsidiary repeatedly identified another Russian company, Dmitrovskiy Experimental Mechanical Plant (DEMZ), as the end user in transaction documentation despite MMZA being the actual recipient. Seven of the nine purchase orders contained MMZA email addresses or identified its Moscow premises as the delivery destination. Extreme's compliance personnel also received information connecting the transactions to MMZA but approved the orders without adequately investigating the discrepancies.
The investigation found that Extreme Russia instructed MMZA employees to register for the company's customer portal using DEMZ's name while retaining their MMZA email addresses. OFAC said these failures demonstrated reckless disregard for US sanctions, particularly because the company's centralized compliance function had reviewed the transactions and overlooked multiple warning signs.
OFAC classified the apparent violations as egregious but acknowledged that Extreme voluntarily disclosed the conduct after discovering it in October 2022. The agency calculated a base penalty of $1,699,650 before reducing the settlement to $1,529,685, taking into account the company's cooperation, lack of recent enforcement history and remedial measures. The settlement also coordinates with a parallel Justice Department resolution, with $487,861 eligible to be credited against payments arising from that agreement.
Extreme ceased its Russian operations in March 2022 and subsequently strengthened its sanctions screening, ownership investigations, acquisition due diligence and employee training. Under the settlement, the company committed to maintaining an enhanced sanctions compliance program for at least five years.
OFAC said the case highlights the importance of identifying sanctioned ownership structures, investigating discrepancies in end-user information and conducting comprehensive sanctions due diligence during acquisitions. The agency emphasized that centralized compliance procedures cannot prevent violations when foreign subsidiaries conceal counterparties or warning signs are inadequately investigated.
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