According to Reuters, Seagate sold these drives to Huawei between August 2020 and September 2021 despite an August 2020 regulation from the US Department of Commerce restricting the sale of certain foreign goods made with US technology to Huawei. Huawei was blacklisted by the US Department of Commerce in 2019 due to national security concerns.
Seagate has agreed to a large fine for violating US government sanctions.
The penalty represents the latest in a series of actions by the US government aimed at preventing China from supplying sophisticated technology that could help modernize its military and threaten US security. The US Commerce Department said Seagate supplied 7.4 million hard drives to Huawei in about a year after the 2020 rule took effect, becoming Huawei’s sole supplier of hard drives.
The US Commerce Department said that two other major hard drive suppliers (most likely Western Digital and Toshiba) stopped shipping to Huawei after the new rule took effect in 2020. "Even after competitors stopped selling to Huawei, Seagate continued to supply hard drives to the company. Today's fine is a consequence of that," a US Commerce Department representative commented.
For its part, Seagate argues that foreign-made drives are not subject to US export controls because they are not directly US products. Meanwhile, the US government argues that the ban involves the entire manufacturing process, not just the final stage as Seagate explains.
The fine Seagate must pay will be paid in installments over five years. The company also agreed to three audits of its compliance program.
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