Eric Zeman / Android Authority
TL;DR
- The US authorities carried out a rule to limit gross sales of sure overseas objects made with US expertise to HUAWEI.
- Seagate was caught promoting arduous drives to the blacklisted firm.
- Seagate will now pay $300 million in a settlement with US authorities.
Seagate, the corporate greatest recognized for its information storage options, has landed in some scorching water. The corporate is now dealing with a hefty positive, in addition to different penalties, for promoting arduous drives to Chinese language tech producer HUAWEI.
The US Division of Commerce claims that Seagate violated US export legal guidelines when it offered arduous drives to HUAWEI. Between August 2020 and September 2021, it’s stated Seagate shipped 7.4 million arduous disk drives (HDD) — value over $1.1 billion in whole — to the blacklisted firm.
The Division of Commerce put HUAWEI on its “Entity Checklist” — a US commerce blacklist — in 2019. The Entity Checklist bans HUAWEI from shopping for components and elements from US firms with out US authorities approval. In August 2020, a rule was added to limit gross sales of sure overseas objects made with US expertise to the producer.
Regardless of the rule going into impact in August 2020, Seagate continued to promote HDDs to the corporate for over a 12 months. With HUAWEI’s different suppliers ceasing shipments, this made Seagate the only provider of this tools.
“Even after HUAWEI was positioned on the Entity Checklist for conduct inimical to our nationwide safety, and its rivals had stopped promoting to them on account of our overseas direct product rule, Seagate continued sending arduous disk drives to HUAWEI,” stated Assistant Secretary for Export Enforcement Matthew S. Axelrod. “In the present day’s motion is the consequence: the most important standalone administrative decision in our company’s
historical past.”
In keeping with Reuters, Seagate believes its foreign-made drives weren’t topic to US export management rules. In a press release, Seagate CEO Dave Mosley had this to say:
Whereas we believed we complied with all related export management legal guidelines on the time we made the arduous disk drive gross sales at difficulty, we decided that … settling this matter was the most effective plan of action.
Though Seagate believes it’s harmless, the corporate has agreed to pay $300 million to settle with US authorities. The corporate must pay the quantity in $15 million increments each quarter for the subsequent 5 years. Seagate has additionally agreed to a few audits of its compliance program and is topic to a five-year suspension of its export privileges.
