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ARTICLE · 11 NOVEMBER 2026

OFAC Settlement, DOJ NPA Highlight Russia Sanctions Risk In Acquisitions

Bass, Berry & Sims PLC
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A U.S. networking solutions company faced over $1.5 million in civil penalties and entered a non-prosecution agreement after its Russian subsidiary continued business with a blocked Russian defense manufacturer. The violations stemmed from inadequate due diligence during an acquisition and failure to investigate red flags indicating the true identity of sanctioned end users.

GlobalGovernment, Public Sector
Faith Dibble
Faith Dibble
Thaddeus R. McBride
Thaddeus R. McBride

Key Takeaways

  • $1.53 Million Civil Penalty, NPA for Russia Violations. OFAC settled, and DOJ entered into a non-prosecution agreement, with Extreme Networks, Inc. related to sanctions violations involving a blocked Russian defense manufacturer.
  • Acquired Contracts Created Sanctions Exposure. Violations stemmed from acquisition of customer contracts involving the Russian party.
  • Compliance Red Flags Went Unaddressed. Ongoing transactions were approved despite conflicting end-user information.

On October 27, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) announced a $1,529,685 settlement with Extreme Networks, Inc. (Extreme), a U.S. company that provides artificial intelligence and cloud networking solutions, to resolve nine apparent violations of the Ukraine-/Russia-Related Sanctions Regulations, 31 C.F.R. Part 589. OFAC is the U.S. government agency with primary responsibility for administering and enforcing U.S. economic sanctions and embargoes.

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