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The U.S. Department of Commerce’s Bureau of Industry and Security this week imposed a $300 million fine on Seagate for violating U.S. export control restrictions. The storage company has admitted to shipping 7.4 million hard drives to Huawei in the 2020-2021 period, in direct violation of restrictions imposed by the U.S. government against the Chinese company in 2020. In response to those actions, the Bureau of Industry and Security has levied the largest standalone fine in the department’s history against Seagate – one that will take Seagate several years to pay off.
Back in 2019 – 2020, the U.S. Department of Commerce’s Bureau of Industry and Security (BIS) added Huawei and virtually all of its subsidiaries to its Entity List and imposed export rules that required any company (U.S.-based or foreign) to obtain an export license from the U.S. DoC to supply any product, item, or service to Huawei that featured an American technology.
Export controls placed on Huawei primarily concerned semiconductors. In particular, chips developed or made in the United States or elsewhere ‚from U.S. software or technology‘ are regarded as the U.S. chips under the rules that went into effect in August, 2020. However, Seagate’s hard drives are also categorized as export-controlled items because they utilize American-designed EDA tools and U.
