Date
30 March 2017
An Investigation by the US Department of Commerce found that ZTE conspired to evade US embargoes by buying US components, incorporating them into ZTE equipment and illegally shipping them to Iran. Photo: Reuters
An Investigation by the US Department of Commerce found that ZTE conspired to evade US embargoes by buying US components, incorporating them into ZTE equipment and illegally shipping them to Iran. Photo: Reuters

China’s ZTE settles with US over Iran, North Korea sales

Chinese telecom equipment maker ZTE Corp. has agreed to pay US$892 million and plead guilty to criminal charges for violating US laws that restrict the sale of American-made technology to Iran and North Korea, Reuters reports.

While a guilty plea deals a blow to ZTE’s reputation, the resolution could lift some uncertainty for a company that relies on US suppliers for 25 percent to 30 percent of its components.

A five-year investigation found ZTE conspired to evade US embargoes by buying US components, incorporating them into ZTE equipment and illegally shipping them to Iran.

In addition, it was charged in connection with 283 shipments of telecommunications equipment to North Korea.

“ZTE Corporation not only violated export controls that keep sensitive American technology out of the hands of hostile regimes like Iran’s, they lied … about their illegal acts,” US Attorney General Jeff Sessions said in a statement.

ZTE agreed to plead guilty to conspiring to violate the International Emergency Economic Powers Act, obstruction of justice for an elaborate cover-up, and making a material false statement for claims it was complying with regulations

The investigation, spearheaded by the US Department of Commerce, followed reports by Reuters in 2012 that ZTE had signed contracts to ship millions of dollars worth of hardware and software from some of the best-known US technology companies to Iran’s largest telecoms carrier.

“ZTE acknowledges the mistakes it made, takes responsibility for them, and remains committed to positive change in the company,” ZTE chief executive Zhao Xianming said in a statement.

The company’s guilty pleas, which must be approved by a judge, will take place in US District Court in Texas. The Shenzhen-based company has a US subsidiary in Richardson, Texas.

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