WASHINGTON: US authorities have imposed a fine of $300 million on tech firm Seagate Technology Holdings PLC for exporting hard disk drives worth over $1.1 billion to Chinese giant Huawei in violation of the country’s export control laws.
On Wednesday, the US Department of Commerce said that Seagate sold the disk drives to Huawei between August 2020 and September 2021 in violation of the August 2020 law that prohibited sales of certain items made in the US to the Chinese company.
In 2019, the US placed Huawei on the Entity List, a trade blacklist, to slash the sale of US-made items to Huawei amid concerns of national security and foreign policy concerns.
The new fine was part of a series of steps the US government took to keep the transfer of sophisticated technology to China that could support its military and threaten US security.
According to the US Commerce Department, Seagate shipped 7.4 million disk drives to Huawei for around a year after the 2020 regime took effect and became Huawei’s only supplier of hard drives.
The other two US suppliers of hard drives stopped supplying to Huawei after the new law took effect in 2020, the US Commerce Department said. Though they were not identified, Western Digital Corp and Toshiba Corp were the other two US firms.
In a statement, Assistant Secretary for Export Enforcement at the US Commerce Department Matthew Axelrod said that even after its competitors stopped selling to Huawei, Seagate continued shipping hard disk drives to the Chinese company and the penalty was the consequence.”
Axelrod said that the administrative fine was the largest in US history not tied to a criminal case.
Seagate said that its foreign-made drives were not subject to US export control regulations because they were not the direct product of US equipment.
In a statement, Seagate CEO Dave Mosley said that while they believed they complied with all relevant export control laws at the time they made the hard disk drive sales at issue, they determined that, and settling the matter was the best course of action.
