The US government has punished Seagate for business with Huawei
The US government has fined Seagate $300 million for selling hard drives to Huawei despite restrictions. All the details
Seagate Technology, an American-Irish company that manufactures hard drives for data storage, has agreed to pay a $300 million fine to the US government. The company violated US export control rules by shipping more than $1 billion worth of hard drives to China-based technology company Huawei, the Commerce Department explained on Wednesday.
THE AMERICAN RESTRICTIONS TOWARDS HUAWEI
In August 2020, the United States passed a law that introduced restrictions on the sale of some devices made with American technologies to Huawei, considered by Washington a threat to national security due to its alleged ties to the Chinese military.
Already in 2019 the company had been included in the Entity List , i.e. a "black list" of foreign subjects subject to trade restrictions because they were deemed dangerous.
OVER 7 MILLION HARD DISKS SOLD
Nonetheless, from August 2020 to September 2021, Seagate shipped 7.4 million hard drives to Huawei, becoming the sole supplier. The Commerce Department explained that the other two companies that sold hard drives to Huawei – namely the American Western Digital and the Japanese Toshiba – have severed relations after the entry into force of the law in 2020.
RECORD FINE OF 300 MILLION
Seagate's $300 million fine is the largest ever imposed by the Commerce Department's Office of Industry and Security (the agency that handles export control rules) not related to criminal cases. The payment will be spread over five years in quarterly installments of 15 million.
SEAGATE'S DEFENSE
Seagate defended itself by arguing that its foreign-made hard drives weren't subject to the restrictions because they weren't manufactured directly with US machinery. The US government explained that the company misinterpreted the rules, which apply to the entire manufacturing cycle and not just to the last stage.
Seagate manufactures its hard drives in the United States, Northern Ireland, Malaysia, Thailand, Singapore and China, using tools – including testing – subject to limitations.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/innovazione/seagate-multa-huawei/ on Thu, 20 Apr 2023 11:11:22 +0000.