Matty, you should start reading
LiveSide
(uhuh yours truly writes there, this particular article too )
I don't understand why they did this, I don't see a free service as doing business either. All we get from Microsoft is that it's because of the embargo and that details of these sanctions are available from the United States Office of Foreign Assets Control. Once and if we hear more you'll find it on LiveSide again, we are on top of it!