June 28 (Reuters) – U.S. technological innovation enterprise Extreme Networks Inc said last year it experienced suspended all organization activities in Russia to demonstrate solidarity with the people today of Ukraine “living less than assault.”

But Reuters has discovered that, as the publicly-traded U.S. organization was unwinding its Russia functions, its most senior manager in the region did not halt performing business enterprise there.

Sergey Gusakov, whilst however doing work as Extreme’s supervisor for previous Soviet republics, made his personal firm in April 2022 to offer Russian clients with IT equipment produced by a competitor of his employer, according to interviews with two men and women common with the subject, as well as Russian company and customs data.

The IT machines bought in Russia by Gusakov’s organization Vektor-T is assembled in China and contains U.S. microprocessors, in accordance to the persons familiar with the issue and photos found by Reuters.

The upshot: microprocessors manufactured by U.S. chip corporations that have banned product sales of their merchandise to Russia – as Serious did – have built their way to the nation embedded in Chinese tools, illustrating the limitation of U.S. trade limitations.

A Reuters investigation late previous 12 months confirmed how voluntary export bans by tech firms and broader Western sanctions adopted following Moscow launched a total-scale invasion of Ukraine in February 2022 have not stopped billions of pounds of computer system and other digital parts from flowing into Russia by means of networks of third-get together suppliers.

Contacted by Reuters about his private company, Gusakov stated: “This is fiction. Goodbye.”

Gusakov has been running his parallel enterprise for far more than a calendar year regardless of a co-employee alerting Extreme’s prime management in summer months 2022 that his involvement in revenue of technological know-how on the facet to Russia could violate company procedures.

A screengrab demonstrates Sergey Gusakov’s LinkedIn account. Even though doing the job for U.S. tech company Intense Networks, the Russian supervisor produced his have organization to offer Russian customers with IT devices produced by a Chinese competitor of his employer, in accordance to two persons common with the subject as nicely as Russian corporate and customs records.

“These violations will guide to a large strike to the name of the Excessive firm from the history of the war in Ukraine,” the complaint said.

Asked about Gusakov’s aspect routines, Excessive spokespeople told Reuters that the make a difference was issue to an investigation by the firm’s legal department and outside the house counsel.

They declined to comment on Vektor-T’s functions, expressing it was outside Extreme’s regulate, and did not react to concerns about Gusakov’s latest position with the corporation.

The spokespeople stated Extreme “takes incredibly seriously its obligations to comply with U.S. export controls” and does no company in Russia.

Previous calendar year, Reuters revealed how Severe, prior to the invasion of Ukraine, offered IT equipment to a U.S.-sanctioned military services business that will make missiles for the S-400 air defense process, one particular of Russia’s most subtle weapons.

In October, Extreme confirmed Reuters’ conclusions, stating its items had absent to “lousy actors,” and informed U.S. regulators it would examine existing and previous workers for probable involvement and put into practice “greatest in course” export controls.


In April very last yr, Serious reorganized its regional office by relocating Gusakov and a number of associates of its Moscow team to Kazakhstan, in accordance to the two people acquainted with the make any difference. Gusakov, who joined Excessive in 2010, in accordance to a profile released on the company’s web site, retained his title as regional manager for the CIS, a group of previous Soviet republics.

But on April 13, 2022, Gusakov co-started OOO Vektor-T in the Russian metropolis of Oryol, Russian corporate information present. He did not notify Excessive, according to the people common with the subject.

On Vektor-T’s web page, which was registered three months before, the enterprise says it develops and provides a selection of computer system networking gear for the Russian market. The company posted profits of about $1 million previous year, in accordance to a lawful submitting.

Products and solutions offered by Vektor-T are created in China by Yunke China Details Technologies Ltd, which is far better known under its DCN model identify, in accordance to the two folks acquainted with the issue. Pictures obtained by Reuters of the insides of switches sold underneath the DCN and Vektor-T brand names present that they are equivalent.

Gusakov and Vektor-T did not react to queries on the use of DCN know-how. DCN confirmed exporting products and solutions to Russia but declined to comment on its enterprise connection with Vektor-T.

In the 12 months to March 31, DCN exported at minimum $11 million truly worth of tools to Russia, such as shipments destined to Vektor-T, Russian customs records demonstrate.

DCN solutions comprise U.S. microprocessors designed by Marvell Technology Inc, based mostly in Wilmington, DE, and Lattice Semiconductor Corp, of Hillsboro, OR, in accordance to the two folks common with the issue. The images obtained by Reuters of the insides of switches bought by DCN and Vektor-T evidently clearly show one of each.

A senior DCN executive informed Reuters that the corporation relies on semiconductors from Marvell for some of its items, expressing the U.S. enterprise “has many resellers in China.” About Lattice, the executive initially reported DCN uses their computer chips, but later retracted, expressing the firm isn’t going to use them. “The U.S. know-how proportion of DCN solutions is pretty modest,” he stated.

The DCN government declined to remark on regardless of whether the Chinese enterprise has authorizations from Marvell and Lattice to export their solutions to Russia.

Marvell emailed Reuters that it does not promote to Russia and that all its distributors and their consumers in China should certify that products and solutions will not be resold to Russia. A firm spokesperson explained Marvell had not shipped specifically to DCN for 10 years but extra it could not normally observe the place its products and solutions had been ending up.

“It is achievable that some of the distributor’s clients could additional resell the solutions to firms to whom Marvell or its distributors have no know-how, visibility or control,” the spokesperson stated.

Lattice instructed Reuters it stopped all revenue to Russia when Ukraine was invaded and is in complete compliance with U.S. export polices. The enterprise did not deal with Reuters’ queries on whether or not DCN was a customer.

Reporting by David Gauthier-Villars in Istanbul and Aram Roston in Washington
Editing by Daniel Flynn

Our Criteria: The Thomson Reuters Rely on Concepts.

By Sia