SEAGATE

Company will pay 300 mil. USD for violating the ban on Huawei, supplying him with HDDs

In 2019, the US government imposed a ban on the Chinese company Huawei, which also meant various export bans on many American technologies. This also applied to hard drives as of August 2020, with Western Digital and Toshiba apparently ceasing supply of drives to Huawei. But that did not apply to society Seagate, which allegedly supplied the Chinese giant with roughly 7.4 million hard drives between August 2020 and September 2021. He thus became the only HDD supplier for the banned company.

These drives had a total value of $1.1 billion, which also resulted in a hefty fine. Better put, Seagate agreed to a settlement of $300 million, which is about 27% of the revenue for the shipments of unauthorized drives. This will wipe the company of any profit from their sale and add financial damages for violating the regulation (the settlement is roughly twice the net profit from the sale of these HDDs). According to the Bureau of Industry and Security (BIS), this is the largest settlement that has not been linked to a criminal case.

Seagate defended itself by saying that the drives supplied to Huawei were not made in the US and using US equipment. But the American authorities pointed out that Seagate had misinterpreted the entire regulation, which does not only apply to the last step of production, but to the entire process. The settlement will be paid by Seagate in quarterly installments of $15 million over 5 years.

by Milan Šurkala