Export Control violations may lead to criminal or civil investigations by the United States Department of Justice National Security Division and offices of the United States Attorneys Offices. This has been the case recently when U.S. companies have sold products to China in violations of export control laws. Export controls safeguard America’s advanced technological know-how including in the U.S. semiconductor industry.
For example on July 28, 2025, Cadence Design Systems Inc., a U.S. provider of electronic design automation software and semiconductor design technology, agreed to plead guilty and pay over $140 Million for unlawfully exporting semiconductor design tools to a university in China under the leadership China’s Military Commission. Cadence was charged with conspiracy to commit export control violations. According to a press release from the Department of Justice, “…According to Cadence’s admissions and court documents, from February 2015 to April 2021, Cadence and its indirectly owned and wholly controlled subsidiary in the PRC, Cadence Design Systems Management (Shanghai) Co. Ltd. (Cadence China), engaged in a conspiracy to commit export control violations in connection with the provision of EDA tools that were subject to the Export Administration Regulations (EAR) to NUDT through Central South CAD Center (CSCC), an alias for NUDT, and another associated entity, Phytium Technology Co. Ltd. (Phytium), without seeking or obtaining the requisite licenses from BIS. Specifically, Cadence, Cadence China, and their employees exported, reexported, and transferred in-country U.S.-origin EDA tools to CSCC in the PRC, despite having knowledge that CSCC was an alias for NUDT. As a result, Cadence and Cadence China exported and caused to be exported EDA tools at least 59 times through September 2020, when Cadence terminated Cadence China’s business relationship with CSCC due to CSCC’s association with NUDT.”
In another case in April 19, 2023 the U.S. imposed a $300 million civil penalty on Seagate Technology of California for alleged selling of hard disc drives to Huawei technologies Lt. According to a Government Press Release, in August 2020, the Dept of Dommerce Bureau of Industry imposed controls over certain foreign-produced items related to Huawei, Despite this, in September 2020, Seagate announced it would continue to do business with Huawei. Seagate did so despite the fact that its only two competitors had stopped selling HDDs to Huawei, resulting in Seagate becoming Huawei’s sole source provider of HDDs. Subsequently, Seagate entered into a three-year Strategic Cooperation Agreement with Huawei, naming Seagate as “Huawei’s strategic supplier” and granting the company “priority basis over other Huawei suppliers.”
Jeffrey Newman is a whistleblower lawyer representing whistleblowers in export controls and other types of whistleblower cases. His website is www.JeffNewmanLaw.com and
he can be reached at Jeff@Jeffnewmanlaw.com or at 978-880-4758
