Huawei: US fines Seagate $300 million for doing business with Huawei


The United States has taken an extremely tough stance on Huawei since 2019 when it almost put a blanket ban on the company. Not only was Huawei banned from selling its products in the US, other companies were barred from doing any sort of business with the Chinese tech giant. Now, the Department of Commerce’s Bureau of Industry and Security (BIS) has imposed a hefty $300 million civil penalty against Seagate. In a statement, BIS said that the penalty has been imposed “to resolve alleged violations of US export controls related to selling hard disk drives (HDDs) to Huawei Technologies Co. Ltd. (Huawei) in violation of the foreign direct product (FDP) rule.”
What did Seagate do to be fined so heavily?
The BIS said that it had imposed restrictions certain foreign-produced items related to Huawei. However, in September 2020, Seagate announced it would continue to do business with Huawei. “Seagate did so despite the fact that its only two competitors had stopped selling HDDs to Huawei, resulting in Seagate becoming Huawei’s sole source provider of HDDs,” said BIS in the statement.
Furthermore, the BIS has accused Seagate of signing a three-year agreement with Huawei to become“Huawei’s strategic supplier” and granting the company “priority basis over other Huawei suppliers.”
  • Seagate sold or exported close to 7.4 million hard drives to Huawei, despite US imposing restrictions.

“Those who would violate our FDP rule restrictions are now on notice that these cases will be investigated and charged, as appropriate,” said Director of the Office of Export Enforcement John Sonderman. “Any company exporting to an entity subject to the additional FDP rule restrictions needs to evaluate its entire manufacturing process to determine if specified US technologies or software were used in building the essential tools used in production. Companies that discover violations should submit voluntary self-disclosures to OEE.”
The fine imposed on Seagate is the heaviest administrative penalty ever by BIS.


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