U.S. Export Control Laws – Seagate Penalty

By Joseph Jacques

May 30, 2023

Recent penalty for Seagate Technology an issue for Taiwan?


Seagate Technology has agreed to pay a $300 million penalty in a settlement with US authorities for shipping over $1.1 billion worth of hard disk drives to China’s Huawei in violation of US export control laws, the Department of Commerce said on Wednesday, April 19.


Seagate sold the drives to Huawei between August 2020 and September 2021 despite an August 2020 rule that restricted sales of certain foreign items made with US technology to the company. Huawei was placed on the Entity List, a US trade blacklist, in 2019 to reduce the sale of US goods to the company amid national security and foreign policy concerns.


The penalty represents the latest in a string of actions by Washington to keep sophisticated technology from China that may support its military, enable human rights abuses or otherwise threaten US security.


This fine represents the largest penalty ever given by the Commerce Department’s Bureau of Industry and Security (BIS). Seagate also agreed to three audits of its compliance program, and is subject to a five-year suspended order denying its export privileges.


Is there a similar issue with Taiwanese businesses?


Of note is that the non-compliant actions were carried out by California and Singapo re subsidiaries of Seagate. International Taiwanese companies should take notice of this situation and verify that the actions of both their primary and subsidiary business units do not inadvertently trade with black-listed businesses or states like China or Russia.


The professionals at Bruce Stone LLC are happy to complete a full compliance review of your entire supply chain, and provide you with peace of mind that your business is fully compliant with all relevant trade laws. Contact us today.


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