The company destroyed $23.5 million worth of products leaving Russia

Technology giant Cisco ended its activities in Russia and Belarus in March 2022 due to Putin’s all-out war against Ukraine in February of the same year. The company’s subsidiary in Russia destroyed $23.5 million worth of unsold equipment at launch.

Although the company took a financial hit, it chose to destroy the equipment rather than let it fall into the hands of the Russians. However, the real impact could have been greater as the company wrote off assets of $67 million, including imported spare parts, furniture and cars.

Those amounts are relatively insignificant for Cisco, which reported revenue of $13.592 billion and net income of $2.773 billion in the second quarter of fiscal 2023.

risk of sanctions

US sanctions and export controls have increased significantly since Russia invaded Ukraine in February 2022. These measures were coordinated with European and Asian allies, and thus maintaining contracts with the Putin government could result in greater financial losses.

U.S. exporters wishing to do business with Russia must report all transactions involving Russian institutions or individuals and be aware of any sanctions imposed on the country’s banking and financial sector. Even non-US companies like Samsung may face US sanctions.

In addition, transportation and logistics within and outside the territory of Russia have become more complex due to restrictions on air and sea connections.