Storage vendor Seagate must pay $300 million to the U.S. government. It allegedly sent over 7 million hard drives to China’s Huawei. Current US export regulations ban companies from doing so.
The fine is for violating sanctions the US government introduced in August 2020. Between that month and September 2021, Seagate continued to sell more than 7 million hard drives to Huawei, even becoming its sole supplier in doing so.
The amount of the fine is somewhat striking. The amount of the fine does not stand up to the assumed value of the delivered drives: $1.1 billion, reports Reuters.
Western Digital and Toshiba did stop shipments to Huawei, according to U.S. authorities. A Seagate representative stated that the company was unaware of any wrongdoing. It was under the impression that the products were not covered by the export ban because they only ended up on U.S. territory for inspection purposes. Seagate’s entire production process is spread across three continents, but it also used equipment made in the U.S. worldwide that fell under the export rules.
The exact amount of the fine was negotiated for eight months, after Seagate received a letter informing them of the investigation. The company may pay the penalty over a five-year period, with installments of $15 million per quarter.
Huawei has been the subject of restrictions for somewhat longer than the mid-2020s export law. The company has been on the U.S. trade blacklist since 2019. At the time, Huawei’s 5G network raised concerns because it could be used to enable Chinese spying. In fact, companies from that country are forced to cooperate with security agencies’ investigations.
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