ZTE pays $892M settlement to USA over illegal sales to Iran

ZTE pays $892M settlement to USA over illegal sales to Iran

In addition to the unprecedented fine, ZTE will also be subject to a seven-year, $300 million suspended penalty, due immediately should the company commit any further wrongdoing.

ZTE entered into an agreement to plead guilty to conspiring to violate the International Emergency Economic Powers Act, obstruction of justice and making a material false statement, the Justice Department said.

The investigation determined that the company has shipped $32 million worth of material to Iran without proper USA export licences since 2010, and also made 283 separate shipments to North Korea during this time.

The company "conspired to evade the long-standing and widely known U.S. embargo against Iran" and do business with entities affiliated with Tehran "to supply, build, operate, and/or service large-scale telecommunications networks" in the country using USA equipment and software. ZTE concluded the agreement with the U.S. Justice, Commerce and Treasury departments.

But much of the investigation was conducted under the Obama administration.

"We are putting the world on notice: the games are over", Ross told reporters at a news conference. "Trump's leadership, we will be aggressively enforcing strong trade policies with the dual objective of protecting American national security and protecting American workers", Ross said. The Shenzhen-based company has a US subsidiary in Richardson, Texas.

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In addition to these monetary penalties, ZTE also agreed to active audit and compliance requirements created to prevent and detect future violations and a seven-year suspended denial of export privileges, which could be quickly activated if any aspect of this deal is not met, a media release said.

"Instituting new compliance-focused procedures and making significant personnel changes has been a top priority for the company", he said in a statement.

"ZTE acknowledges the mistakes it made, takes responsibility for them and remains committed to positive change in the company", said ZTE Chairman and CEO Zhao Xianming, who was promoted to the leadership positions in April 2016 with a promise to tighten the company's export control. "We are committed to a new ZTE, compliant, healthy and trustworthy", he said.

In 2012, the US began probing ZTE over the illegal sales.

Federal prosecutors accuse ZTE of shipping American "servers, switches, routers" and other cellular network equipment through China to Iran without obtaining the required export licenses from USA authorities.

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