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US imposes $300m penalty over hard disk drive exports to Huawei

US authorities have imposed a $300m (£241m) penalty on tech firm Seagate for allegedly violating export controls of hard disk drives to China’s Huawei.

Seagate Technology shipped more than $1.1bn worth of goods to Huawei after export controls were introduced in 2020, the Department of Commerce said.

The penalty is the latest move by the US government to stop sales of sophisticated technology to China.

US authorities have said such equipment may be used by China’s military.

Seagate shipped 7.4 million drives to Huawei for about a year after the rule was imposed by the administration of former President Donald Trump, according to the Commerce Department.

It continued to do so “even after Huawei was placed on the Entity List for conduct inimical to our national security,” Matthew Axelrod of the department’s Bureau of Industry and Security (BIS) said.

“This settlement is a clarion call about the need for companies to comply rigorously with BIS export rules, as our enforcement team works to ensure both our national security and a level playing field,” Mr Axelrod added.

Huawei’s other two main hard drive suppliers had stopped exports to the Chinese firm in accordance with the new rule, the department said.

The penalty will be paid in instalments of $15m every three months for the next five years, Seagate said.

It comes as the US continues its drive to curb sales of technology, such as advanced computer chips, to China.

Huawei was put on a US trade restrictions list in 2019 as part of Washington’s efforts to cut sales of American goods to the company over national security and foreign policy concerns.

Washington has said the technology could be used by the Chinese military to support human rights abuses or threaten US national security in other ways.

The Chinese government has repeatedly denied the allegations.

In recent years, many Western countries have taken measures against Chinese technology firms over security fears.

Companies specialising in 5G technology such as Huawei, ZTE and Hytera have been banned from installing equipment on networks in the US, Australia, Japan, India, and Canada.

Meanwhile, the UK government has ordered equipment installed by Huawei to be removed from 5G networks by 2027.

Earlier this week, Chinese surveillance technology giant Hikvision denied that it was illegally disguising its products sold to the US government to enable Chinese espionage.

It was responding to BBC queries about allegations revealed in a recently leaked Pentagon document.


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