Apple Extends Its Crimea Block To Products And Services

This past weekend, Crimea made tech news when it emerged that Apple and Valve had sent out notices to developers in the region informing them their accounts would be cut off, in line with U.S. sanctions against the region. Now Apple has extended that further, ordering retailers to halt all shipments and sales of products like the iPhone and Mac computers and services in the region effective February 1.

Retailers that sell and ship Apple products and services to customers in Crimea were contacted by Apple on Wednesday of this week with the order to stop activities. The news was first reported in the Russian press citing a tweet from blogger and consultant Eldar Murtazin (see here and here and here). We have now confirmed it directly with retailers who have received the letter. The partners have asked us not to use their names.

Apple has not provided a comment for this article.

A copy of the letter in Russian is here, with a basic translation beneath that:

Уважаемый Партнер,

Со ссылкой на раздел 5G “Соблюдение требований экспортного контроля” Договора с Авторизованным Сервисным Центром Apple от 01.04.14, доводим до вашего сведения, что с 1-го февраля 2015 года, в соответствии с новыми санкциями в отношении Автономной Республики Крым, принятыми Правительством США 19 декабря 2014 года, вы обязуетесь не осуществлять продажу продукции Apple и/или не предоставлять услуги, относящиеся к продукции Apple в Автономной Республике Крым.

Dear Partner,

With reference made to Section 5G, «Export Compliance» of Apple Authorized Service Provider Agreement dated 01.04.14, please be informed that in accordance with the new sanctions on the Crimea Region announced by the US Government on December 19, 2014 you shall not sell Apple products and/or provide services related to Apple products in the Crimea Region as of February 1, 2015.

Please acknowledge this notice by signing one copy and sending back to
[Contact at Apple Russia in Moscow]

Yours faithfully,
LLC Apple Rus

Apple’s move to shut off all business with Crimea is a result of sanctions that the U.S. first published on December 19, 2014, in line with a similar move from the European Union.

Crimea is a peninsula that juts into the Black Sea with less than 2 million inhabitants, but as I’ve written before, it has become a bone of contention over tensions between Ukraine and Russia.

The U.S and the EU both instituted the economic blocks to exert pressure on Russia, which annexed Crimea in March, 2014, as part of its ongoing conflict with Ukraine. The U.S. and Europe support Ukraine in that conflict and therefore oppose Russia’s annexation move.

The U.S. order signed by President Obama covers technology specifically alongside other goods and services, and calls for blocks of the importation into the U.S. “directly or indirectly, of any goods, services, or technology from the Crimea region of Ukraine”; and “the exportation, reexportation, sale, or supply, directly or indirectly, from the United States, or by a United States person, wherever located, of any goods, services, or technology to the Crimea region of Ukraine”. Other areas covered in the order include investments and immigration.

While the U.S. is trying to use economic sanctions as a way of getting Russia to budge on Crimea and its overall position against Ukraine, there remains a lingering worry among some that I’ve spoken to that this conflict could potentially spill into a wider conflict with Russia itself, for example Russia retaliating by blocking imports from U.S. companies like Apple.

If something like that happened it would be a significantly bigger deal: with a population of 144 million people and a strong tech culture, Russia represents a lot of emerging market opportunity for Apple (and others).

These developments come at a time when Apple is seeing some good traction in Russia, along with some hiccups, too.

Analysts at GfK found that Apple’s iPhone overtook Samsung to become the leading smartphone brand in terms of value in 2014; it remains second to Samsung in unit sales.

That’s come at a time when Apple has been raising its prices in the country. At one point last month Apple closed its online store as the value of the Rouble plunged but then reopened it with prices up by 35%.

On another front, the Russian government has been looking to tighten the reigns where digital content is concerned. Some tech companies have been facing blocks of their sites, and others have shut down operations in the wake of new Russian regulations over what kinds of content is legal, and how the government is able to access material in Russian and on Russian servers.