Extreme Networks pays $975,721.84 as US and Chinese sanctions rules collide

The DOJ entered the non-prosecution agreement with Extreme Networks on 27 October under its 2026 Corporate Enforcement and Voluntary Self-Disclosure Policy. The company will forfeit $487,860.92 in proceeds and pay a criminal fine of $487,860.92, for a total criminal penalty of $975,721.84. The department said the disclosure was not timely, because it arrived under imminent threat of disclosure by a news publication. Extreme Networks still cooperated fully and remediated the conduct, which made the case a "Near Miss" voluntary self-disclosure rather than a declination. The DOJ calls it the first non-prosecution agreement in a near-miss case under the policy.

For any technology supplier selling into Russia or China, the practical lesson is that screening a name against a list is not enough. Ownership chains count, and services count alongside hardware. A late self-disclosure still bought a fine here, not a pass. Neither agency has said whether other networking suppliers face comparable exposure.

The sales went to Avangard, a Russian weapons manufacturer owned by Almaz-Antey, which OFAC added to its sanctions list in July 2014.

Between about March 2018 and March 2022, Extreme Networks processed and fulfilled 11 purchase orders through its then Russia-based subsidiary, Extreme Networks Rus LLC, according to the DOJ. Roman Rozhavsky, assistant director of the FBI's Counterintelligence and Espionage Division, framed the outcome as a warning. "Let this announcement serve as a clear warning: if you attempt to arm our adversaries by violating U.S. law, justice will find you," he said. The designation of Almaz-Antey dates to July 2014, and the last purchase order in the DOJ account falls in March 2022.

OFAC's parallel bill

OFAC's parallel settlement is the larger bill. The agency said Extreme Networks agreed to pay $1,529,685 to resolve apparent violations. Those involved nine shipments of networking equipment and services from the United States between September 2018 and March 2022. OFAC assessed the violations as voluntarily self-disclosed and egregious. That combination keeps the penalty high even when a company reports itself. The DOJ said Extreme Networks will also resolve the parallel OFAC administrative action.

The two accounts do not match on volume. OFAC counts nine shipments starting in September 2018; the DOJ counts 11 purchase orders starting around March 2018.

Neither announcement reconciles the gap, and the difference matters for anyone trying to size exposure from the case. A supplier reading the DOJ release would model the problem differently from one reading OFAC's page.

Why screening got harder

Avangard was blocked by operation of law as a majority-owned subsidiary of a designated company, not because it appeared as a named counterparty in a transaction review. That is the part exporters tend to miss. The case adds to scrutiny on end-user screening, beneficial ownership checks and controls over related services as well as hardware.

Jeremy Pierczynski, acting special agent in charge at Homeland Security Investigations in Detroit, said the laws "prevent U.S.-origin products and services from supporting adversaries' military capabilities".

The same conduct produced two bills: $975,721.84 in criminal penalties and a $1,529,685 OFAC settlement.

The other direction: Shanghai

The pressure runs the other way too. The Shanghai Maritime Court ordered a Singapore carrier to pay about RMB 5 million plus interest. The carrier had refused to deliver a shipment of electronic products and returned the cargo to Shanghai without the shipper's consent. It cited the US Entity List and argued it was entitled to abandon the carriage because of sanctions risk. The court held that Article 12 of China's Anti-Foreign Sanctions Law applies mandatorily and overrides the parties' contractual choice of law. It dismissed the carrier's counterclaim, and neither party appealed, so the judgment is final.

Norton Rose Fulbright, which published its analysis on 2 November, describes the ruling as the first known Chinese judgment expressly confirming mandatory application of Article 12.

What is still open

In Europe, the question is who gives way when US and local rules collide. Osvaldo Zavala Giler is registrar of the International Criminal Court. He told POLITICO in an interview published on 23 October that the European Commission should act "as soon as possible" to give clear guidance on US sanctions against the court. The court went from being targeted at prosecutors and judges in February 2025 to blanket sanctions on 9 October this year. The EU has repeatedly backed the court but has resisted calls to activate a mechanism that would forbid firms from complying with US laws.

Both regimes are now being enforced, and both are being enforced against the companies caught in the middle.