The Commerce Department states that the technology company breached US export control laws by shipping to a Chinese firm.
On Wednesday, the US Department of Commerce revealed that Seagate Technology Holdings has agreed to pay a $300m penalty as part of a settlement for violating US export control laws. Seagate had sold over $1.1bn worth of hard-disk drives to Huawei between August 2020 and September 2021, despite a rule implemented in August 2020 that prohibited sales of certain foreign items made with US technology to Huawei. The US government added Huawei to the Entity List in 2019, with the aim of decreasing sales of US products to the company due to national security and foreign policy concerns.
As per the Commerce Department, Seagate was the only supplier of hard drives to Huawei and shipped 7.4 million drives to the company for approximately a year even after the implementation of the 2020 rule. The department added that the other two primary suppliers of hard drives had stopped supplying to Huawei after the rule took effect, although they were not named. However, a 2021 report on Seagate by the US Senate Commerce Committee identified Western Digital and Toshiba Corp as the two other suppliers.
According to Axelrod, the administrative penalty imposed on Seagate was the biggest in the agency’s history not related to a criminal case. Seagate contended that its drives manufactured outside the US were not subject to US export control regulations since they were not directly produced using US equipment.
