Data storage infrastructure provider Seagate Technology has agreed to pay a $300m penalty for violating export restrictions placed on China’s Huawei Technologies.
The US Department of Commerce’s Bureau of Industry and Security (BIS) said that between August 2020 and September 2021, Seagate sold approximately 7.4 million hard disk drives (HDDs) to Huawei.
The HDDs were valued at over $1.1bn.
In May 2019, Huawei and some of its non-US affiliates were placed on the “Entity List” over concerns that the Chinese company poses a threat to US national security.
The following year, to “better address the continuing threat” posed by Huawei to US national security and foreign policy interests, the BIS also imposed control on foreign-produced trade items.
According to BIS, despite the restrictions, Seagate continued doing business with the Chinese firm, even as its only two competitors had stopped selling drives to Huawei.
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BIS assistant secretary for export enforcement Matthew Axelrod said: “Even after Huawei was placed on the Entity List for conduct inimical to our national security, and its competitors had stopped selling to them due to our foreign direct product rule, Seagate continued sending hard disk drives to Huawei.
“Today’s action is the consequence: the largest standalone administrative resolution in our agency’s history.”
Over five years, Seagate will pay the fine in instalments of $15m per quarter, with the first instalment due in October 2023.
Seagate CEO Dave Mosley said: “While we believed we complied with all relevant export control laws at the time we made the hard disk drive sales at issue, we determined that engaging with BIS and settling this matter was the best course of action.
“We are now moving forward fully focused on executing our strong technology roadmap to support the growing demand for mass data storage solutions.”