OFAC Settles with Extreme Networks, Inc. for $1,529,685 over Nine Exports to Blocked Russian Defense Manufacturer MMZA

OFAC announced a $1,529,685 settlement with Extreme Networks, Inc. for nine apparent violations of the Ukraine-/Russia-Related Sanctions Regulations. Between September 2018 and March 2022, Extreme exported networking equipment and related services from the United States to JSC Moskovskiy Mashinostroitelniy Zavod Avangard (MMZA), a Russian defense manufacturer blocked by operation of law as majority-owned by designated JSC Concern Almaz Antey. The amount reflects OFAC’s determination that the apparent violations were voluntarily self-disclosed and egregious.

Who this affects

• For exporters: Companies must conduct sufficient sanctions-related due diligence before acquiring a company or its assets and remain vigilant regarding sanctions risks thereafter, including oversight of foreign activities and operations.
• For investors: Extreme’s obligation to pay a portion of the settlement amount will be deemed satisfied up to an equal amount of its payment of a fine to DOJ arising out of the same conduct.
• For counsel/compliance: Extreme has established and will maintain for at least five years a sanctions compliance program, including hiring a Senior Product Counsel (or similar role), management commitment, risk assessment, and enhanced screening for entities majority-owned by a sanctioned party.
• For policymakers: The action emphasizes U.S. foreign policy objectives to deny the Russian Federation’s ability to supply the military sectors of its economy and to degrade Russia’s capacity to wage war against Ukraine.

The read

The record centers on post-acquisition continuity of a customer relationship with a blocked person under the 50 percent rule. Extreme Russia acquired contracts naming MMZA as an end user in March 2018; Almaz Antey had been designated on July 16, 2014 under E.O. 13661, so MMZA was blocked at all relevant times. Subsequent purchase orders named Dmitrovskiy Experimental Mechanical Plant (DEMZ) as end user while containing MMZA email addresses, office addresses, or website references that Extreme’s screening did not resolve. OFAC’s framing treats the combination of M&A diligence gaps, intermediary red flags, and foreign-affiliate oversight as the operative pattern, not isolated transaction errors.

What was the action?

OFAC settled Extreme Networks, Inc.’s potential civil liability for nine apparent violations of § 589.201 of the Ukraine-/Russia-Related Sanctions Regulations, 31 C.F.R. part 589. Between September 2018 and March 2022, Extreme exported hardware and software from the United States to MMZA.

What’s the penalty / scope, and how is it set?

The settlement amount is $1,529,685. OFAC determined the apparent violations were voluntarily self-disclosed and egregious; under the Enforcement Guidelines the base civil monetary penalty equaled one-half of the statutory maximum ($1,699,650). The final amount reflects consideration of the General Factors. A portion is satisfied by credit against an equal DOJ fine arising out of the same conduct. Extreme must maintain a sanctions compliance program for at least five years.

Who else is exposed?

Extreme Networks Rus LLC (former Russian subsidiary, which ceased operations in March 2022) and a third-party distributor that supplied end-user website responses and an end-user statement. DEMZ appears in the record as the named intermediary end user on the purchase orders. Not specified beyond these parties and the pattern of majority-owned blocked entities.

What happens next

Extreme maintains the sanctions compliance program and associated measures for at least five years following the Agreement’s execution date, including the Senior Product Counsel role and enhanced screening. OFAC coordinated the action with the Department of Justice’s parallel resolution of the same conduct. Residual exposure for related parties or further interagency outcomes remains the open question on the record.

Long-tail keywords: Extreme Networks OFAC settlement 2026 $1,529,685, MMZA Almaz Antey 50 percent rule sanctions, Ukraine-/Russia-Related Sanctions Regulations 31 CFR 589.201, Extreme Networks Rus LLC MMZA exports, OFAC egregious voluntary self-disclosure networking equipment, DEMZ intermediary end-user red flags OFAC, Extreme Networks five-year sanctions compliance program.