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Seagate violated sanctions by selling hard drives to Huawei, Senate committee says

Seagate violated sanctions by selling hard drives to Huawei, Senate committee says

A US Senate committee says manufacturer Seagate violated government sanctions by sending hard drives to Chinese manufacturer Huawei.

Republican minority employees of the Senate Committee on Commerce, Science and Transportation released a report accusing Seagate of ignoring restrictions on shipping semiconductor components to Huawei in August 2020 – a category the report alleges was "possibly difficult." " Is. disc drives are included." The report orders Seagate to halt shipments to Huawei and urges the US Commerce Department to "prioritize" the implementation of the sanctions, which were claimed by the Trump administration as Huawei has been a national posed a threat to security.

Huawei has used Seagate, Western Digital and Toshiba hard drives for its growing external storage business. Western Digital and Toshiba halted shipments following sanctions that prohibited companies operating in the US from selling certain products to Huawei without a license, the report said. But Seagate said in 2020 that it did not believe it needed such a license for its hard drives.

Congressional Republicans publicly grilled hard drive companies about Huawei earlier this year. The report said that Seagate executives confirmed in October 2021 that it had not applied for a license to sell to Huawei, and while officials said they had stopped sending hard drives to Huawei, they did not. . Told when the shipment was stopped. Citing documents and industry reports, the report concludes that it was "common sense within the storage industry" that Seagate continued to enforce them well after the August rules went into effect.

The report claimed that Seagate took a windfall advantage by ignoring the restrictions imposed on Huawei. "Seagate stock has risen nearly 86 percent since the rules took effect," the report said. "The initial tilt began around October 2020, shortly after the effective date, as Seagate reportedly continued shipments to Huawei as its sole US supplier of hard disk drives." It also believes that chip shortages have driven up stock prices across the board.

A Seagate spokesperson told The Wall Street Journal that the company "complies with all laws applicable to its business and operations, including export control regulations." It declined to comment specifically on its relationship with Huawei.

In a statement to The Verge, the Commerce Department's Bureau of Industry and Security (BIS) said it was committed to "thoroughly investigating" any allegations of violations, including allegations related to Huawei and China. . . "Enforcement action can generally be made public at the end of the investigation," a spokeswoman said of the agency's next steps. "BIS is committed to providing information to Congressional offices upon the conclusion of such investigations and looks forward to continued dialogue with Congress on our national security and economic interests."

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