U.S. alleges Seagate broke export guidelines to promote Huawei exhausting drives-source By Reuters

By Karen Freifeld

(Reuters) – Seagate Expertise Holdings mentioned in a submitting on Wednesday it has been warned by the U.S. authorities that the corporate could have violated export management legal guidelines by offering exhausting disk drives to a buyer on a commerce blacklist.

The shopper is China’s Huawei, a supply acquainted with the matter instructed Reuters, which is on the U.S. Commerce Division’s entity record and banned from shopping for U.S. exports and sure foreign-made objects with out authorities approval.

Seagate was warned in a “proposed charging letter” it acquired from the Commerce Division on Aug. 29, based on the submitting with the Securities and Change Fee.

    However the firm’s place, based on the submitting, is that the exhausting disk drives will not be topic to the U.S. export laws, and that it didn’t interact in prohibited conduct as alleged by the Commerce Division.

The submitting didn’t establish the shopper on the entity record.

Seagate, a Dublin-based firm that additionally operates in California, mentioned it was cooperating with the Commerce Division and trying to resolve the matter.

The merchandise at difficulty had been offered to the blacklisted firm and its associates between August 2020 and September 2021, based on the disclosure.

The corporate paused its shipments to Huawei a 12 months in the past, the individual mentioned.

Seagate mentioned the timing of any closing consequence is unclear, as are the phrases. It additionally couldn’t estimate the vary of loss or penalty, though it mentioned a fabric affect on the enterprise was doable.

The corporate may face civil penalties of as much as $300,000 per violation or twice the worth of the transaction, whichever is larger, for administrative expenses.

The corporate hopes to make its case in an upcoming assembly with the Commerce Division, the supply mentioned. It despatched an preliminary response to the letter in late September and filed extra data this week.