Seagate was fined $300 million for allegedly selling Huawei storage devices without a proper license for more than 12 months.
Between August 2020 and September 2021, the company reportedly earned $1.1 billion in revenue from the sale of 7.4 million hard drives in 429 separate deals with the Chinese tech pariah.
The settlement between Seagate subsidiaries and the U.S. Department of Commerce’s Bureau of Industry and Security (BIS) stipulates that the company will pay out $300 million over five years with a payment plan of $15 million quarterly.
Seagate is fine
Huawei is one of many entries on the U.S. list of companies that require specific licenses for certain types of trade, but non-compliance proved a costly mistake for Seagate with a penalty of nearly 3% of its total revenue (not profit).
Huawei entered the US list in August 2020 as Seagate’s main rivals ended shipments hard drives to a Chinese company (via BIS (opens in a new tab)).
“Integrity is one of our core values and we are strongly committed to compliance as evidenced by our global compliance team. press release (opens in a new tab).
“Today’s action is a consequence: the largest single administrative resolution in the history of our agency. This settlement is a call to clarify that companies must strictly adhere to the BIS export rules,” said Matthew S Axelrod, Assistant Secretary of Export Enforcement.
The $300 million settlement, while proportionately low compared to total revenue, is expected to leave a significant hole in Seagate’s finances to the point of postponing the release of its third-quarter fiscal report by five days.