Seagate Technology fined over Huawei breach of US China export rules
Published: 04:22 20 Apr 2023 EDT
Seagate Technology PLC (NASDAQ:STX) has been struck with a US$300mln penalty in the US after breaching export controls by sending over a billion dollars worth of hard drives to China’s Huawei.
7.4mln hard drives worth US$1.1bn were sent by Seagate to Huawei between August 2020 and September 2021, despite the former being blacklisted by the US over national security concerns.
Trade rules had been imposed under the Donald Trump administration in August 2020 to prevent exports of sophisticated technology to Chinese companies.
Due to the restrictions, data storage company Seagate became Huawei's sole supplier of hard drives as competitors paused shipments.
"This settlement is a clarion call about the need for companies to comply rigorously with Bureau of Industry and Security export rules,” the department's assistant secretary for export enforcement, Matthew Axelrod said.
The settlement, which will be paid in quarterly installments of US$15mln for the next five years, is the “consequence” of Seagate not doing so, Axelrod added.
Seagate boss Dave Mosley responded: “We believed we complied with all relevant export control laws at the time we made the hard disk drive sales at issue.”
“Settling this matter was the best course of action,” he added.
