*

Former Assistant Secretary Matthew Axelrod expects Trump

administration to aggressively enforce export controls

*

Cadence Design Systems ( CDNS ) and Applied Materials ( AMAT ) are under

investigation over sales to China

(Adds comment from Justice department in 10th paragraph, and

additional background, bullet points)

By Karen Freifeld

Feb 27 (Reuters) -

The U.S. Commerce Department is likely to impose hefty fines

on companies in the coming months for illegally shipping

technology to customers in countries like China, a top

department official who left last month said on Thursday.

Matthew Axelrod, as Commerce's assistant secretary for

export enforcement during the Biden administration, pushed for

tougher penalties against companies that violated export

controls on China, Russia and Iran.

He signed off on a $300 million penalty on Seagate

Technology in 2023 for shipping 7 million hard drives to China's

Huawei, which is on the U.S. Commerce Department Entity List

that restricts sending U.S. goods and services to the company

because of its risks to national security.

"We had hoped some major investigations would resolve in

2024, but it looks like it will now be 2025," said Axelrod, who

expects the Trump administration to aggressively enforce export

controls. He is joining the Gibson Dunn law firm on Monday.

Axelrod would not identify the companies under scrutiny.

But San Jose, California-based Cadence Design Systems ( CDNS )

, a chip design software firm, said in a filing last

week that it began discussions in December with the Commerce and

Justice departments regarding "preliminary findings of their

investigations and a potential resolution" of a matter related

to certain customers and business activity in China.

Another open investigation involves Santa Clara,

California-based chip equipment maker Applied Materials ( AMAT )

, which is being probed by both the Commerce and Justice

departments over shipments to China's top chipmaker,

Semiconductor Manufacturing International, as Reuters

reported in 2023.

In a filing last week, Applied Materials ( AMAT ) said it had

continued to receive government subpoenas, which started in 2022

and related to certain China customer shipments. The company was

cooperating with the government, the filing said, and could not

predict the outcome.

Spokespeople for Applied Materials ( AMAT ) and Cadence declined

comment beyond the disclosures. The Commerce Department did not

respond to requests for comment.

A Justice Department spokesman declined comment on matters

that it said "may or may not be under investigation." But, the

spokesman said, the department's National Security Division

"continues to aggressively investigate and prosecute export

control violations to secure advanced U.S. technology from

illicit acquisition by nation state adversaries."

In addition to boosting civil penalties, Axelrod helped

launch a Disruptive Technology Strike Force with the Justice

Department in 2022 to file criminal cases against those who help

foreign adversaries obtain sensitive U.S. technology, work he

also expects to continue, even if not under the same initiative.

Axelrod, an official in the Justice department before

Commerce, will co-chair a new practice at Gibson Dunn on

sanctions and export enforcement.

(Reporting by Karen Freifeld, Editing by Louise Heavens and

Lincoln Feast.)