Seagate finds itself in serious trouble with the US government after it was discovered the company's hard drives were being sold to Huawei between August 2020 and September 2021.
As Reuters reports, Seagate acknowledged in a Securities and Exchange Commission (SEC) filing that it has "received a proposed charging letter (“PCL”) from the U.S. Commerce Department’s Bureau of Industry and Security (“BIS”), alleging violations of the U.S. Export Administration Regulations (“EAR”)."
The storage company stands accused of supplying hard drives to "a customer and its affiliates listed on the BIS Entity List." Seagate doesn't name the customer in question, but Reuters has spoken to a source familiar with the situation who confirmed that customer is Chinese company Huawei Technologies.
A spokesperson for the Commerce Department wouldn't comment directly on the case, but said the department is committed to "fully investigating any allegation of violations," and that it "aggressively pursues criminal and civil actions related to unauthorized exports to China."
Seagate states in the SEC filing that no violation has occurred and that 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 company also states that it can't estimate the "range of loss and/or penalty" it will receive if found guilty. We also don't know how long it will take for the Commerce Department to reach a final decision on the matter.