U.S. officials have accused Seagate Technology Holdings of potentially violating export control laws by selling hard disk drives to a customer on a U.S. trade blacklist.
The letter alleges that the Dublin-based company, which also operates in California, “acted in violation” of the U.S. Export Administration Regulations, which govern the export and re-export of some commodities as well as software and technology.
It allegedly did so by “providing Seagate hard disk drives (HDDs) to a customer and its affiliates listed on the BIS Entity List between August 2020 and September 2021,” the Seagate filing states.
Under U.S. law, companies operating in the United States that plan to sell certain commodities or do business with other companies that are on the government’s entity list are required to obtain a special license beforehand.
Seagate on Wednesday said it had responded to the proposed charging letter, stating it “did not engage in prohibited conduct as alleged by BIS, because, among other reasons, Seagate’s HDDs are not subject to the EAR.”
“The matters raised by the PCL remain unresolved at this time, and there can be no assurance as to the timing or terms of any final outcome,” the company said, adding that it is unable to estimate the range of loss or penalty, if any.
It noted, however, that the outcome of the issue could have a material impact on the business operations, financial condition, and cash flows.
Alleged Dealings With Blacklisted Company
Seagate’s filing did not identify the alleged blacklisted customer.The report states that the committee found evidence that suggests that Seagate Technology “continued shipping hard disk drives to Huawei after the rule went into effect.”
Seagate Benefitted From ‘Uneven Playing Field’
“By shipping these prohibited products to Huawei, it appears Seagate benefitted from an uneven playing field to the detriment of national security and at the expense of its competitors who abide by the rule designed to combat threats posed by companies with known connections to the Chinese government,” the Senate report added.According to Reuters, Seagate could face fines of up to $300,000 per violation, or twice the value of each transaction—whichever is greater—for administrative charges.
The Epoch Times has contacted the U.S. Commerce Department for comment.