Intel Strong-armed Russia into Concession

WikiLeak document says Intel threated to relocate to India or China unless Russia allowed Intel to import 1,000 encrypted computer platforms outlawed in Russia

Computer chip maker Intel won a vital concession from the Russian government by threatening to pull its operations from the country, a leaked diplomatic cable claimed on Dec. 7.

Intel told the government that it would relocate either to India or China unless the state allowed it to import some 1,000 encrypted computer platforms outlawed in Russia, the dispatch released by WikiLeaks said.

The chip maker said hundreds of Russian employees would lose their jobs -- a threat that eventually secured the company a meeting with heads of the Russia's all-powerful Federal Security Service.

Intel got its way, but then worried its initiative would be exploited by competitors.

"Intel believes this breakthrough is one that other IT companies could piggy-back on," said the November 2009 U.S. Moscow Embassy dispatch.

"While this does demonstrate some limited flexibility on the part of the FSB -- and thus a step forward, whether other U.S. companies can receive similar waivers remains to be seen," the dispatch said of the main successor to the KGB.

Russia in 2006 signed an agreement promising to streamline its rules for licensing the import of encrypted information and systems.

U.S. officials said this promise has done little to simplify the import procedure and that Western firms suffer from the bureaucratic hassles involved.

Copyright Agence France-Presse, 2010

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