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Seagate fined $300 million for supplying Huawei with onerous drives

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Computing storage producer Seagate has agreed to pay a $300 million penalty imposed by the US Department of Commerce (DOC) for delivery over $1.1 billion value of onerous disk drives to Huawei, violating export management restrictions. An investigation by Commerce’s Bureau of Trade and Safety (BIS) decided that Seagate shipped 7.4 million onerous drives to Huawei between August 2020 and September 2021 with out acquiring an export license, regardless of a rule launched in August 2020 that restricts gross sales to the Chinese language firm.

The $300 million penalty is the most important nice ever imposed by the BIS that isn’t tied to a prison case. The BIS says it’s greater than double Seagate’s income in promoting the onerous drives.

Seagate grew to become Huawei’s sole onerous drive provider after it claimed US commerce restrictions didn’t apply to its HDDs

Huawei was first positioned on the Entity Checklist, a US commerce blacklist, in May 2019 amid issues the corporate’s communications expertise might assist the Chinese language authorities spy on American networks. These restraints had been expanded in August 2020 when BIS imposed a license requirement on sure foreign-produced objects made with US expertise being bought to Huawei. Seagate claimed its onerous drives weren’t topic to the restrictions (in accordance with Reuters), and continued to do business with Huawei, turning into the corporate’s sole supplier of HDDs.

“Even after Huawei was positioned on the Entity Checklist for conduct inimical to our nationwide safety, and its opponents had stopped promoting to them attributable to our international direct product rule, Seagate continued sending onerous disk drives to Huawei,” stated Matthew Axelrod, Assistant Secretary for Export Enforcement.

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Below the phrases of the settlement, Seagate can pay the $300 million nice in quarterly installments of $15 million over 5 years, ranging from October 31, 2023. The corporate additionally agreed to a multi-year audit and a five-year suspended “denial order,” which might activate and stop Seagate from exporting merchandise if it fails to pay any installments or full its audit necessities.

“We imagine getting into this settlement with BIS and resolving this matter is in the perfect curiosity of Seagate, our prospects and our shareholders,” stated Seagate CEO Dave Mosley in a statement. “Whereas we believed we complied with all related export management legal guidelines on the time we made the onerous disk drive gross sales at problem, we decided that partaking with BIS and settling this matter was the perfect plan of action.”

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