Seagate hit with $300m penalty for shipments to Huawei
Seagate has agreed to pay a $300 million penalty to U.S. authorities for shipping hard disk drives that are worth more than $1.1 billion. Seagate violated the United States export control laws that ban shipping products to Huawei.
According to the Department of Commerce's announcement on Wednesday, Seagate sold hard disk drives to Huawei between August 2020 and September 2021. The export control laws restrict American companies from selling certain items to Huawei, which is currently placed on the U.S. trade blacklist.
Between August 2020 and September 2021, Seagate shipped over 7.4 million drives to Huawei and became the company's sole supplier of hard drives. The law took effect in 2020, but Seagate didn't stop its trade route to China for a while. The other two big hard disk suppliers of Huawei, Western Digital and Toshiba, immediately suspended their relations with the company, according to a 2021 report of the U.S. Senate Commerce Committee on Seagate.
Seagate will pay the $300 million penalty in $15 million installments per quarter over five years. The company will start paying in October, and it has also lost its export privileges for five years.
U.S. and China's technologic dispute
The United States is not taking any steps back against Huawei or China. Moreover, the U.S. government is also getting ready to issue a ban on TikTok, making it unavailable throughout the country. A recent bill empowered Washington to make it happen, supporting the Restricting the Emergence of Security Threats that Risk Information and Communications Technology (RESTRICT) Act.
Right now, several countries, including the United States, Canada, the United Kingdom, Australia, New Zealand, and a couple more European countries, have restricted using TikTok on governmental devices. Companies like BBC and Denmark's public service broadcaster have also banned TikTok from corporate devices. Western countries and companies take the spy war against China pretty seriously.
A recent report revealed that Huawei had to replace 13,000 parts in its products due to United States trade sanctions. Huawei continues its efforts on vertical integration but still uses old parts in some products.
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Are the drives still under warranty
Doesn’t the carrier have a responsibility to ensure that goods being shipped are not on any export ban list?
If that’s the case, then the carrier should also be required to pay a penalty for knowingly transporting goods to China that have been placed on an export ban list.
That’s assuming the goods were shipped direct to China and not via another country.
Use a middle man to bypass illegal sanctions
Oops! You need a middle man to do the exchange for you or big brother America will try destroy you.
No doubt Seagate employed at least 1 Export Coordinator who knew that the export of their product to Huawei was not legal. Seagate may have made a financial decision to take the profits and live with whatever penalties were assessed.