WASHINGTON – U.S. Sen. Roger Wicker, R-Miss., ranking member of the Senate Committee on Commerce, Science, and Transportation, today released a report following a committee investigation that finds Seagate Technology likely in violation of the Foreign Direct Product Rule implemented by the Bureau of Industry and Security (BIS) at the Department of Commerce, which restricts Huawei’s access to sensitive technology. The investigation found that Seagate flouted the regulation designed to protect U.S. national security by making unlawful transactions with Huawei for as long as one year, allowing the company to gain significant profits as it monopolized the market.
“My investigation highlights the need for stronger monitoring and enforcement efforts at BIS,” said Wicker. “Our national security interests are being threatened by Communist China, and companies need to take this situation seriously by following the law. I hope the administration will work to make BIS more vigilant in its actions, particularly when it comes to protecting critical supply chain components like semiconductors and hard disk drives.”
Earlier this year, minority staff on the committee began investigating industry compliance with the regulation and enforcement by the BIS. Any shipment of prohibited products after September 14, 2020, likely including hard disk drives with semiconductors as component parts, violated this rule. In a reflection of industry consensus, Seagate’s top competitors in the hard disk drive market, as well as most of its semiconductor suppliers, ceased unlicensed shipments to Huawei as soon as the rule became effective.
In August, Wicker sent a letter to BIS inquiring about the implementation of the rule. Wicker subsequently sent multiple letters to the BIS to determine whether enforcement actions have been taken against Seagate. The response from the BIS failed to demonstrate that the agency is fulfilling its enforcement duties. These letters are part of Wicker’s ongoing oversight focused on probing compliance with the rule from leading hard disk drive suppliers and its enforcement by the Department of Commerce.
Click here to read the report.