# Seagate violated export ban by shipping 7M disk drives to Huawei, US says

Source: https://arstechnica.com/tech-policy/2023/04/seagate-violated-export-ban-by-shipping-7-million-disk-drives-to-huawei-us-says

## Summary

Seagate agreed to pay a $300 million fine to settle US allegations that it shipped hard disk drives to Huawei in violation of export controls imposed in 2020. The Bureau of Industry and Security (BIS) at the US Department of Commerce said the penalty is the largest standalone administrative penalty it has ever issued. BIS said Seagate admitted to ordering or causing the export of 7.4 million disk drives to Huawei without authorization, and that Seagate announced in September 2020 it would keep doing business with Huawei after the August 2020 rule took effect. Western Digital and Toshiba stopped shipments to Huawei after the rule, according to BIS.

## Article

Seagate yesterday agreed to pay a $300 million fine for selling hard disk drives to Huawei, settling US government officials’ allegation that shipments to the Chinese company violated export controls imposed in 2020. The fine is “the largest standalone administrative penalty” ever issued by the US Department of Commerce’s Bureau of Industry and Security (BIS), the agency said.

“Even after Huawei was placed on the Entity List for conduct inimical to our national security, and its competitors had stopped selling to them due to our foreign direct product rule, Seagate continued sending hard disk drives to Huawei,” Assistant Secretary for Export Enforcement Matthew Axelrod said.

As part of the settlement, “Seagate admitted to the conduct set forth in the Proposed Charging Letter involving Seagate US and Seagate Singapore,” the BIS said. Seagate violated the rule “by ordering or causing the reexport, export from abroad, or transfer (in-country)” of 7.4 million disk drives to Huawei without BIS authorization, the agency said.

Despite BIS imposing its rules in August 2020, “Seagate announced it would continue to do business with Huawei” in September of that year, the agency said. Huawei’s other suppliers, Western Digital and Toshiba, both stopped shipments to Huawei after the August 2020 rule took effect, as Reuters noted.

“The two other companies capable of making HDDs promptly—and publicly—indicated that they had ceased sales to Huawei,” the BIS said. “Of the three, only Seagate refused to stop sales and transactions involving Huawei. BIS’s $300 million monetary penalty is more than twice what BIS estimates to be the company’s net profits for the alleged illegal exports to or involving Huawei.”