Cisco denies skirting sanctions that forbid sales to Russia's military

Cicso John Chambers Fortune2Fortune Brainstorm TECH 2014Cisco CEO John Chambers

Cisco is being accused of changing sales records and booking deals under a false customer name after sanctions against Russia began, according to documents obtained by Buzzfeed.

The implication is that Cisco has been selling equipment that will wind up in the hands of government agencies that US companies are not allowed to sell to, while making it look like the customers were not under such sanctions.

Cisco denies these allegations.

The U.S. and European Union have imposed economic sanctions against Russia which forbid U.S. companies from selling advanced tech gear to the Russian military in response to Russia’s annexation of Crimea and conflict in eastern Ukraine.

For instance, Buzzfeed reported one case where sales were booked to the Chamber of Commerce, although the alleged real buyer was the the FSB, the successor to the KGB, an anonymous source told Buzzfeed. When Buzzfeed reached out to the Chamber of Commerce to ask about buying Cisco equipment a spokesperson there replied:

This is strange … We are not a commercial organisation which purchases big things, we do not purchase anything besides office supplies.

Cisco vehemently denies the charges, telling us that it investigated all the documents presented by Buzzfeed and found “Cisco is in complete compliance with the US and EU sanctions.”

It told Buzzfeed the changes were made to customer names to fix a quirk in its software that put the wrong names on some deals in the first place. It said the changes were innocent and were not done to mask the identity of the buyer, and that it corrected the error.

Cisco has been under scrutiny before for its operations in Russia, accused of allegedly bribing Russian officials to win deals. Cisco said in early 2014 that the SEC and DOJ were looking into those allegations.

In the meantime, Cisco’s sales in Russia have tanked. Buzzfeed reports that Cisco cancelled $US1.7 million in deals after the sanctions were imposed and outgoing CEO John Chambers specifically called out Russia as a problem market for Cisco last week, noting that sales in the country were down 41% from the year-prior quarter.

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