(Reuters) – The Association of Southeast Asian Nations (ASEAN) is gravely concerned about escalating violence in Myanmar, the bloc’s chair Cambodia said ahead of a special meeting of its foreign ministers on the crisis.

The top U.S. diplomat for East Asia, Daniel Kritenbrink called the situation in Myanmar “tragic” and said finding away to deal with it was a “key priority” for Thursday’s meeting in Jakarta.

Kritenbrink told a Washington think tank the United States would make “a very forceful call” at next month’s East Asia Summit, which Cambodia will host, for more pressure to be applied on the ruling military junta.

“We are not going to sit idly by while this violence continues; we’re not going to sit idly by while the junta prepares for what will be completely fake and sham elections that they talk about holding next year as well,” he said.

He said the United States, which has imposed sanctions on the military leadership, would take “additional steps to put pressure on the regime,” but did not elaborate.

A statement from ASEAN chair Cambodia called for restraint, an immediate cessation of fighting, and for all parties to pursue dialogue.

“We are deeply saddened by the growing casualties, and the immense suffering that ordinary people in Myanmar have endured,” it said.

Myanmar’s generals have been barred from high-level ASEAN meetings since last year, when the army ousted Nobel laureate Aung San Suu Kyi’s elected government, detaining her and thousands of activists and launching a deadly crackdown that has given rise to armed resistance movements.

A spokesperson for the Cambodian foreign ministry said Myanmar would not be participating in Thursday’s meeting, which aims to come up with recommendations on how to push forward the peace process ahead of an ASEAN summit next month.

The ASEAN chair cited the bombing of Myanmar’s largest prison, conflict in Karen State and an air strike in Kachin State on Sunday, which local media said killed at least 50 people, as examples of the recent increase in violence.

It said the conflict was not only exacerbating the humanitarian situation but undermining efforts to implement a peace plan agreed between ASEAN and the junta last year.

The junta says it is trying to restore order by combating “terrorists” with which it will not engage in dialogue.

ASEAN has a longstanding policy of non-interference in members’ sovereign affairs, but some nations have called for the bloc to be bolder in taking action against the junta.

Malaysia’s foreign minister has said ASEAN must “seriously review” the plan and “if it should be replaced with something better”. Saifuddin Abdullah has also met his counterpart from Myanmar’s National Unity Government, a shadow administration outlawed by the junta.

(Reporting by Prak Chan Thul in Phhom Penh, Stanley Widianto in Jakarta and David Brunnstrom in Washington; Writing by Ed Davies and Kanupyiya Kapoor; Editing by Martin Petty and Jonathan Oatis)

By Marc Frank

HAVANA (Reuters) – A few dozen U.S. entrepreneurs braved tough U.S. sanctions and Cuba’s worst economic crisis in decades to attend a conference in Havana on Wednesday focusing on the new private sector and aimed at boosting flagging engagement between the Cold War-era foes.

The Cuban Chamber of Commerce and Washington-based consultancy FocusCuba, which are hosting the gathering, said the three day event was the first such forum since at least 2018 when former U.S. President Donald Trump piled new sanctions on top of the decades-old trade embargo.

Both the Cuban and the U.S. delegations criticized the sanctions – most of which are still in place – and called on Democrat U.S. President Joseph Biden to drop his Republican predecessor’s policies.

Cuban Chamber of Commerce President Antonio Luis Carricarte called the gathering in the famous Hotel Nacional an “historic day,” praising the persistence of representatives in attendance from both side of the Straits of Florida.

During a brief thaw in relations under former President Barack Obama, hundreds of U.S. businesses arrived to explore opportunities on the all but forbidden Communist-run island nation.

Some, from cruise ship companies to Western Union Co and Starwood Hotels inked groundbreaking agreements, only to have new U.S. sanctions force them to renege. Others continue to do business.

The government has licensed Cubans to operate nearly 5,500 private small and medium sized businesses over the last year, in a first since Fidel Castro’s 1959 Revolution, opening new possibilities for partnerships with foreign investors.

“Almost everything we do is with the new booming private sector,” said Cuban-American Hugo , whose Miami-based Fuego Enterprises Inc operates an online food market that processes 4,000 orders in Cuba per day.

“It is important American businesses see this for themselves,” said Cancio, who was attending the conference.

U.S. entrepreneurs in attendance represent a range of industries from food services to online shopping, digital money transfers, shipping, and finance.

“I think participants are seeking clarity in terms of what is possible with investment on the Cuban side in this new private sector, though any agreements must also be approved by U.S. regulators,” said Phil Peters, founder of FocusCuba told Reuters. “We need more clarity there as well.”

The White House did not immediately respond to a request for comment.

The Biden administration has loosened some restrictions on Cuba around remittances, tourism and migration. It has also expressed interest in supporting Cuba’s private sector.

(Reporting by Marc Frank; Additional reporting by Nelson Acosts in Havana and Steve Holland in Washington.; Editing by Marguerita Choy)

By John McCrank

(Reuters) – The U.S. Securities and Exchange Commission on Wednesday voted to adopt new rules that will require companies that restate their financials due to compliance lapses to claw back excess compensation from their executives.

The rule, which Congress mandated following the 2007-2009 financial crisis, was left unfinished in 2015, but was revived by the SEC under Chair Gary Gensler last year as part of a broader effort to crack down on corporate malfeasance by strengthening the agency’s tools for penalizing executives.

SEC commissioners voted 3-2 in favor of the new rules, with the two Republican commissioners voting against the proposal and the two Democratic commissioners voting for it along with Gensler.

“I believe that these rules, if adopted, would strengthen transparency, the quality of financial statements, but also beyond that, investor confidence in those statements,” Gensler said ahead of the vote.

The new rules apply to public companies of all sizes and to any executive officer who performs policymaking decisions and who has received incentive compensation, including stock options, dramatically expanding the scope of the agency’s existing clawback powers, which were created in 2002.

Under the new rules, companies will have to recover compensation in excess of what the executive concerned should have received in the event the companies’ financials are restated due to “material noncompliance” with securities laws.

The rules apply to compensation paid in the three years leading up to the restatement, regardless of whether the misstatement was due to fraud, errors, or any other factor.

They also direct U.S. stock exchanges to establish listing standards requiring each issuer to develop and implement such a policy.

Issuers that do not adopt and comply with compensation recovery policies in line with the rule’s standards will be subject to delisting.

(This story has been corrected to clarify in paragraphs 1 and 6 that companies, not the SEC, will have to clawback excess executive compensation.)

(Reporting by John McCrank; Editing by Andrea Ricci and Jonathan Oatis)

By Daphne Psaledakis

WASHINGTON (Reuters) – The United States on Wednesday targeted Iranian officials, including those overseeing Tehran’s Evin prison, and others in new sanctions on Iran over internet censorship and a crackdown on protests ignited by Mahsa Amini’s death in police custody.

Demonstrations following the 22-year-old’s death in custody on Sept. 16 have become one of the boldest challenges to Iran’s clerical leadership since the 1979 revolution.

Wednesday’s sanctions marking 40 days since Amini’s death are the latest round imposed by Washington on Iran over the crackdown on protests, as the United States seeks to increase pressure on Tehran.

“We will continue to find ways to support the people of Iran as they peacefully protest in defense of their human rights and fundamental freedoms, and in doing so, will continue to impose costs on individuals and entities in Iran who engage in the brutal repression of the Iranian people,” U.S. Secretary of State Antony Blinken said in a statement.

The U.S. Treasury Department in a separate statement said it imposed sanctions on Islamic Revolutionary Guard Corps (IRGC) officials, including the commander of its intelligence organization, as well as provincial and Iranian prison officials and people and entities tied to internet censorship.

Wednesday’s move targets Hedayat Farzadi, who the Treasury accused of operating Evin prison as its warden. The prison mostly holds political prisoners, and Washington says numerous protesters have been sent there, where it says they have been subjected to torture.

The Treasury accused Farzadi of having overseen the torture and mistreatment of prisoners in the Iranian prison system before assuming leadership of Evin, and said he has been known to carry out executions and public amputations. Several prisoners under his responsibility have died, the Treasury said.

Evin holds political prisoners and many detainees facing security charges, including Iranians with dual nationality. Iranian American businessman Siamak Namazi is held at Evin.

Seyyed Heshmatollah Hayat Al-Ghaib, the director-general of Tehran Province Prisons – which the Treasury said gave him oversight of Evin – was also named in Wednesday’s action.

Wardens of several other prisons in Iran were also designated, as were directors-general of prisons in provinces including Kurdistan.

Hossein Modarres Khiabani, the governor of Sistan and Baluchistan province, where Treasury said some of the worst violence in the latest round of protests has taken place, was also targeted.

Also named were two members of Iran’s intelligence and security ministry, as well as the Ravin Academy founded by them, which the Treasury said trains people in cyber-security and hacking as well as recruits candidates for the ministry.

Iranian company Samane Gostar Sahab Pardaz Private Ltd Co, which Washington said provides censorship, surveillance and espionage tools to the Iranian government, was also designated.

Iran’s mission to the United Nations in New York did not immediately respond to a request for comment.

The U.S. action freezes any U.S. assets belonging to those named and generally bars Americans from dealing with them. Those dealing in certain transactions with them also risk being hit with sanctions.

A wide range of Iranians have come out onto the streets since Amini’s death, with some calling for the downfall of the Islamic Republic and chanting “Death to (Supreme Leader Ayatollah Ali) Khamenei”.

Rights groups said at least 250 protesters have been killed, including teenage girls, and thousands have been arrested.

The authorities, who have accused the United States and other Western countries of fomenting what they call “riots”, have yet to announce a death toll but state media have said around 30 members of the security forces have been killed.

Armed men attacked a Shi’ite Muslim shrine in the Iranian city of Shiraz on Wednesday, killing at least 15 people, state news agency IRNA said, as security forces clashed with protesters marking 40 days since Amini’s death.

(Reporting by Daphne Psaledakis, Tim Ahmann and Rami Ayyub; Editing by Deepa Babington and Jonathan Oatis)

By Dawn Chmielewski

(Reuters) – As corporations around the world including Adidas AG cut ties with Kanye West, music streaming service Spotify Technology SA said it would not remove the rapper’s music unless his label requested it.

Music from the artist now known as Ye did not violate anti-hate policies, Spotify chief Daniel Ek told Reuters.

Recent antisemitic remarks made by the rapper are “just awful comments,” and would have warranted removal from Spotify for violating its policies, which prohibit hate speech, if they had been on a podcast or recording, Ek said.

But none of that content can be found on Spotify.

“It’s really just his music, and his music doesn’t violate our policy,” said Ek, adding, “It’s up to his label, if they want to take action or not.”

That has not happened.

Universal Music’s Def Jam label, which owns the copyright to West’s recordings from 2002 through 2016, and continued distributing his releases until last year, issued a statement condemning Ye’s remarks, saying “There is no place for antisemitism in our society”.

It did not ask for the removal of Ye’s recordings, many of which are critically acclaimed works. The music also can be found on Apple Music and YouTube Music.

Hollywood power broker Ari Emanuel called for the major streaming services to end their business relationships with Ye after the rapper promoted antisemitic conspiracy theories in interviews and on social media, where he Tweeted that he would go “death con 3 On JEWISH PEOPLE.”

Since the remarks, Ye has lost high profile and lucrative partnerships. Creative Artists Agency, one of the world’s largest talent agencies, no longer represents him, film and television studio MRC Entertainment has dropped a documentary and sneaker-maker Adidas on Tuesday ended a partnership estimated to be worth more than $500 million in royalty payments and other fees.

Spotify, however, has faced backlash when it punished musicians for their personal misconduct.

The streaming service removed R Kelly’s music from its playlists and recommendations in 2018 following allegations of sexual misconduct. It walked back the policy after other artists threatened boycotts, giving users a mute button to block particular artists, instead.

If Ye’s label asks for the rapper’s catalog to be removed, Ek said, “Obviously we’ll respect their wishes.”

(Reporting by Dawn Chmielewski in Los Angeles.; Editing by Shri Navaratnam)

By Alden Bentley

(Reuters) – War. Inflation. Polarization. Appalling headlines ricochet around the internet, stocks are skidding, wealth is eroding and the mood on Wall Street has rarely been gloomier.

While some opportunists thrive in adversity, experts say that for many investors it takes a toll on mental health.

Relatively new fields in psychology and economics examine investor behavior, herd mentality, panic, mania and hidden biases that affect decision making – often in ways that negatively affect portfolio performance. Nobel prizes have been awarded to several behavioral finance pioneers in recent decades.

The medical profession has distinguished specialists too. John Schott MD, a portfolio manager at The Colony Group, retired psychiatrist and a recognized expert on market psychology, coined the term Bear Market Depressive Syndrome (BMDS) in his 1998 book “Mind Over Money.”

In a 2009 American Psychoanalyst article, Schott listed BMDS symptoms as sadness, sleep disturbance, decreased concentration, irritability, guilt, discouragement, gastrointestinal problems and/or headaches.

Who has not experienced some of those during times of intense stress?

To keep traders’ heads screwed on straight, some prominent hedge funds have retained in-house psychiatrists and performance coaches, of the type popularized by the Wendy Rhoades character on the Showtime TV series “Billions.”

Schott told Reuters the work of Nobel laureate Vernon Smith demonstrated that market bubbles are primarily due to psychological factors, not financial ones. After prolonged bull markets, investors tend to go into denial during bear markets.

“Part of that, from a psychological standpoint, is defense against depression,” said Schott, who practiced psychoanalysis for 38 years.

“Why did I buy it? Why didn’t I sell it? There is a lot of self blaming rather than accepting the markets go up and down,” he said.

MARKET RISK FACTORS ALMOST UNPRECEDENTED

The S&P 500 was down more than 27% year-to-date in mid-October. Even with a bounce over the past seven trading days it is still down 21% this year and has not been this low since it was emerging from the COVID-19 pandemic panic two years ago. The ghastly downswing contrasts the bull market euphoria a year ago as the benchmark index was advancing to a record high, reached in January.

For younger investors who have not experienced prolonged downturns, the bull-market, buy-the-dip strategy of the past decade no longer works. They can experience a sort of cognitive dissonance, Schott said.

The number of risk factors to process these days is almost unprecedented in the post-World War II era: Russia’s war on Ukraine, the worst inflation in memory, interest rates going up, economies slowing down, fear of another war over Taiwan, U.S. midterm elections and former U.S. President Donald Trump’s continued divisive presence.

A weekly survey by the American Association of Individual Investors shows the ratio of the number of bulls to bears at -33.8% ranks as among the most negative in the survey’s 35-year history.

Goldman Sachs said its Sentiment Indicator in the last week of September posted its 31st consecutive negative reading, a stretch surpassed only by 32 straight weeks of negative readings ending in March 2016.

Jim Paulsen, chief investment strategist at the Leuthold Group, in Minneapolis, noted that the “blue mood” goes beyond Wall Street, with consumer confidence at a post-war low and sentiment down among small businesses and in the C-suite.

“I don’t remember any other time when so many CEOs warned of an imminent recession before actually being in one. Media stories help feed this fear frenzy. It’s not their fault;

there is just so much good material,” he wrote in a recent note.

Call it “information overload,” with news amplified 24/7 on social media. Seema Shah, chief global strategist at Principal Asset Management termed it the “echo chamber of negativity.”

“One of the things now, relative to previous downturns, is the prevalence of social media, where you have that dispersion of news flow, negativity and opinions coming through very, very quickly,” she told Reuters. “That essentially moves the market at a faster pace than you would have seen in previous periods of market weakness.”

But, as they say: “It is darkest just before dawn.” Negative sentiment readings indicate the market is running out of sellers, and are thus considered a bullish signal.

“Bear markets don’t generally end with good news. They end when the news is hopeless, and when it just feels like there is just no chance of this thing recovering soon,” Paulsen said.

(Reporting by Alden Bentley; Editing by Josie Kao)

By Lucia Mutikani

WASHINGTON (Reuters) – The U.S. trade deficit in goods widened sharply in September, likely as a strong dollar and softening global demand weighed on exports, but that did not change expectations that trade led an anticipated rebound in economic growth in the third quarter.

The report from the Commerce Department on Wednesday also showed moderate increases in wholesale and retail inventories last month, suggesting slowing domestic demand was forcing businesses to become more cautious about ordering more goods.

The Federal Reserve is aggressively hiking interest rates to tame inflation, boosting the dollar and curbing spending. The data was published ahead of the release on Thursday of the government’s advance estimate of third-quarter GDP.

“Net exports will contribute significantly to GDP growth in third quarter, adding about 3.0 percentage points,” said Daniel Silver, an economist at JPMorgan in New York.

The goods trade deficit increased 5.7% to $92.2 billion last month. September’s increase reversed only a portion of the prior months’ declines, leaving the gap considerably smaller in the third quarter. Trade and consumer spending were the economy’s only bright spots in the second quarter.

According to a Reuters survey of economists, GDP likely rebounded at a 2.4% annualized rate in the third quarter after shrinking at a 0.6% pace in the April-June quarter. The economy contracted in the first half of 2022, but is not in recession, with more than 2.5 million jobs created during that period.

Exports of goods fell 1.5% to $177.6 billion last month. The decline was led by a 14.0% tumble in food exports.

Shipments of industrial supplies, which include crude oil, fell 3.1%. Exports of consumer goods also declined. But there were increases in exports of capital goods, motor vehicles and other goods.

The dollar has gained nearly 11% against the currencies of the United States’ main trade partners this year, which could make American goods less competitive, but help in the fight against inflation.

The Fed has raised its benchmark overnight interest rate from near zero in March to the current range of 3.00% to 3.25%, the steepest pace of policy tightening in a generation or more.

Goods imports rose 0.8% to $269.8 billion. They were lifted by a 4.4% jump in imports of capital goods, which bodes well for business spending on equipment. There were also increases in imports of motor vehicles and consumer goods, likely as businesses stocked up for the holiday season. But imports of food, industrial supplies and other goods fell.

Stocks on Wall Street were trading higher. The dollar fell against a basket of currencies. U.S. Treasury prices rose.

Graphic: Goods trade balance – https://graphics.reuters.com/USA-STOCKS/dwpkdgewnvm/tradebal.png

SLOWING GLOBAL DEMAND

“While the stronger dollar has helped both to temper the cost pressures created by rising global food and energy prices and to narrow the nominal trade deficit, it is almost certain to contribute to weaker net exports over the coming year,” said Mark Hopkins, a senior economist at Moody’s Analytics in West Chester, Pennsylvania. “Slowing economic growth abroad, and the rising risk of global recession is likely to further erode real net trade and its contribution to domestic production.”

But with trade flows still well below pre-pandemic levels, a significant deterioration in the trade deficit is not expected.

The Commerce Department also reported that wholesale inventories increased 0.8% last month after advancing 1.4% in August. Stocks at retailers gained 0.4% after rising 1.4% in August. Retailers are finding themselves saddled with excess merchandise, a function of both easing supply chain bottlenecks and slowing demand for goods, forcing them to offer discounts.

Motor vehicle inventories increased 1.9% after surging 3.5% in August. Excluding motor vehicles, retail inventories dipped 0.1% after rising 0.7% in August. This component goes into the calculation of gross domestic product.

Inventories were the biggest single drag on GDP in the second quarter. Economists expect a neutral impact in the third quarter. Higher borrowing costs continued to exert downward pressure on the housing market, weighing on the economy.

A second report from the Commerce Department on Wednesday showed new single-family home sales decreased 10.9% to a seasonally adjusted annual rate of 603,000 units in September.

Sales plummeted 17.6% on a year-on-year basis in September.

Graphic: New home sales – https://graphics.reuters.com/USA-STOCKS/znpnbdkwepl/nhs.png

The 30-year fixed mortgage rate averaged 6.94% last week, the highest in 20 years, up from 6.92% in the prior week, according to data from mortgage finance agency Freddie Mac.

The median new house price in September was $470,600, a 13.9% jump from a year ago. There are, however, signs that the ebbing demand for homes is cooling house price inflation.

There were 462,000 new homes on the market at the end of last month, up from 457,000 units in August. At September’s sales pace it would take 9.2 months to clear the supply of houses on the market, up from 8.1 months in August.

“The housing market is still normalizing to an economy under pressure from higher borrowing costs, nagging inflation, and uncertainty about future Fed activity,” said Jeffrey Roach, chief economist at LPL Financial in Charlotte, North Carolina.

“Housing demand will likely fall further in the coming months, putting downward pressure on median prices.”

(Reporting By Lucia Mutikani; Editing by Nick Zieminski, Jonathan Oatis and Andrea Ricci)

By Kate Abnett

BRUSSELS (Reuters) -The European Union could introduce a gas price cap this winter to limit excessive price spikes, but only if countries give Brussels a mandate to propose the measure, the bloc’s energy chief said on Wednesday.

After months of high gas prices driven by Russia slashing supplies, the 27-country EU is considering whether to cap prices – although with countries still split over the idea after weeks of talks, Brussels has not yet made a formal proposal to make it happen.

The European Commission said last week it could make a legal proposal for a temporary “dynamic” cap on the Dutch Title Transfer Facility (TTF) gas exchange, if EU countries asked for such a proposal.

EU energy commissioner Kadri Simson said it would still be possible to have that cap in time for winter. The Commission has said the price limit would be designed to kick in as a “last resort measure” if prices spike.

“This Dutch TTF gas benchmark cap, we can introduce this winter already if we get the mandate,” Simson told a committee of EU lawmakers.

EU countries could provide that mandate at an emergency meeting of EU energy ministers on Nov. 24, when they will decide whether to ask Brussels to propose the cap.

But a consensus on the idea appeared elusive when energy ministers met on Tuesday, with countries still split.

Germany leads a small group of states opposed to price caps, warning that limiting the price companies can pay for gas could compromise their ability to buy enough fuel as Europe heads into winter with scarce Russian supplies.

Italy, Belgium, Poland and 12 other states want an EU-wide price cap, citing the inflationary pressure that recent gas price spikes have unleashed on their economies.

Uusually, a reinforced majority of 15 ministers from EU countries would be able to pass the measure. But German chancellor Olaf Scholz said last week that the ministers’ decision would be “unanimous” – suggesting one country would be able to block it.

(Reporting by Kate Abnett, Charlotte Van Campenhout; Editing by Emelia Sithole-Matarise)

By Karen Freifeld

(Reuters) -Seagate Technology Holdings said in a filing on Wednesday the U.S. government has warned the company that it may have violated export control laws by providing hard disk drives to a customer that a source familiar with the situation identified as Huawei Technologies.

Reuters was the first to report the disclosure on Wednesday and to identify Huawei as the customer. Huawei is on the U.S. Commerce Department’s entity list and banned from receiving U.S. exports and certain foreign-made items without government approval.

Seagate was warned in a “proposed charging letter” it received from the Commerce Department on Aug. 29, according to the filing with the U.S. Securities and Exchange Commission.

The filing said the company’s position is that the hard disk drives are not subject to the U.S. export regulations, and that it did not engage in prohibited conduct as alleged by the Commerce Department.

Seagate’s filing did not identify the customer. Seagate paused its shipments to Huawei a year ago, said the source familiar with the matter.

The Commerce Department declined comment on any potential pending enforcement matters but a spokesperson said the department is committed to “fully investigating any allegation of violations” of the rule restricting certain foreign-made items, adding that it “aggressively pursues criminal and civil actions related to unauthorized exports to China.”

A spokeswoman for Huawei had no immediate comment. The Chinese telecommunications equipment maker was placed on the entity list in 2019 for activities deemed contrary to U.S. national security.

Seagate, a Dublin-based company that also operates in California, said it was cooperating with the Commerce Department and sought to resolve the matter.

The products at issue were provided to the entity listed customer and its affiliates between August 2020 and September 2021, according to the disclosure.

The company said the timing of any final outcome is unclear, as are the terms. It also could not estimate the range of loss or penalty, although it said a material impact on the business was possible.

The company could face civil penalties of up to $300,000 per violation or twice the value of the transaction, whichever is greater, for administrative charges.

The company hopes to make its case in an upcoming meeting with the Commerce Department, the source said. It sent an initial response to the letter in late September and filed more information this week.

Seagate’s shares were down 11 percent early Wednesday after the company reported financial results and disclosed the warning over the alleged export violations.

At issue is a U.S. regulation that governs the way certain foreign-made items destined for Huawei become subject to U.S. export regulations.

The Foreign Direct Product Rule, as revised in August 2020, restricts companies from shipping items made outside the United States to Huawei if they are the direct product of certain U.S. technology or software, or produced by essential equipment that is the direct product of U.S.-origin software or technology. Such shipments can only be made with a U.S. license.

The rule was designed to cut the global supply of semiconductors to Huawei.

Seagate’s view is that its foreign-made hard drives are not subject to the restriction, the source told Reuters, because they are neither the direct product of any U.S. semiconductor technology or software nor of any equipment that itself is the direct product of any U.S. semiconductor technology or software.

However, the source said, the Commerce Department’s proposed charges are based on an interpretation that foreign-made items are subject to the rule if equipment that is the direct product of U.S. semiconductor technology or software was used to produce any component of the end-item, no matter how far removed in the production process.

The hard disk drives are made in China and Thailand and also do not have enough U.S. content to make them subject to U.S. export rules, the source said.

The company has not applied for U.S. licenses for the hard disk drives but has applied for licenses for other items when it determined they were required, the source added.

Republicans on the U.S. Senate Commerce Committee issued a report last October that found that Seagate had likely shipped restricted products to Huawei for as long as a year, giving it a competitive advantage over Toshiba and Western Digital, the other primary suppliers of hard disk drives, who said they had ceased shipments to Huawei after the new rule took effect in 2020.

Western Digital told Reuters in May 2021 it had stopped shipping to Huawei in September 2020 and applied for a license, which was pending. The company did not respond to requests for an update and comment.

Toshiba also did not respond to requests for comment.

(Reporting by Karen Freifeld; Editing by Chris Sanders and Howard Goller)

By David Shepardson

(Reuters) -Ford Motor Co said on Wednesday it would exit Russia, the latest automaker to leave in the aftermath of Russia’s invasion of Ukraine.

Mercedes-Benz also on Wednesday said it would withdraw from the Russian market and sell shares in its industrial and financial services subsidiaries to a local investor.

Ford said it has finalized a deal to sell its 49% stake in the Russia-based Sollers Ford joint venture for a “nominal” undisclosed price.

The U.S. automaker took a $122 million writedown connected to its suspension of Russian operations earlier this year but will not take additional writedowns in connection with Wednesday’s announcement, the company said.

“Ford shares will be transferred to the Joint Venture for a nominal value,” the company said, adding that it retains the option to buy them back within a 5-year period “should the global situation change.”

Ford sold around 20,000 vehicles in Russia in 2021, according to analyst estimates. It announced a suspension of its operations in Russia in March.

Ford in 2019 said the joint venture was closing two assembly plants and an engine factory in Russia, exiting the country’s passenger vehicle market. Ford restructured its investment in Russia in 2019 and ceded control the venture to Sollers.

Ford follows U.S. companies including Cisco Systems Inc and Nike Inc in announcing an exit from Russia, after Western countries imposed sanctions on Moscow over its invasion of Ukraine, making it nearly impossible for manufacturers to do business there.

(Reporting by Abhijith Ganapavaram in Bengaluru and David Shepardson in Washington; Editing by Vinay Dwivedi and Bill Berkrot)