Seagate Technology Fined $300 Million for Violating Export Controls to Huawei

US authorities fined Seagate Technology $300 million for violating export controls on hard disc drives sold to China’s Huawei. According to the Department of Commerce, Seagate shipped over $1.1 billion in goods to Huawei following the implementation of export controls in 2020. The penalty is the latest in a series of steps taken by the US government to halt sales of sophisticated technology to China, which authorities believe could be used by the Chinese military. For about a year after the Trump administration imposed the rule, Seagate shipped 7.4 million drives to Huawei. According to Matthew Axelrod of the Department of Commerce’s Bureau of Industry and Security (BIS), this continued “even after Huawei was placed on the entity list for conduct inimical to our national security.”

Seagate will pay the penalty in $15 million instalments every three months for the next five years. According to the Department of Commerce, Huawei’s other two main hard drive suppliers had stopped exports to the company in accordance with the new rule. According to Mr. Axelrod, the penalty is a warning to companies to strictly follow BIS export rules, “as our enforcement team works to ensure both our national security and a level playing field.”

In 2019, Huawei was placed on a list of US trade restrictions as part of Washington’s efforts to reduce sales of American goods to the company due to national security and foreign policy concerns. The US has stated that the technology could be used by the Chinese military to support human rights abuses or to threaten US national security in other ways. The Chinese government has denied the allegations on numerous occasions. Many Western countries have taken measures against Chinese technology firms in recent years due to security concerns.

Companies specialising in 5G technology, such as Huawei, ZTE, and Hytera, have been barred from installing equipment on networks in the United States, Australia, Japan, India, and Canada. Meanwhile, the UK government has ordered Huawei equipment installed on 5G networks to be removed by 2027. Hikvision, a Chinese surveillance technology company, denied earlier this week that it was illegally disguising its products sold to the US government in order to facilitate Chinese espionage. It was responding to questions from the BBC about allegations revealed in a recently leaked Pentagon document.