U.S. fines China's ZTE $1.2 bn for violating Iran, N.Korea sanctions

ZTE will plead guilty to conspiracy to unlawfully export, obstruction of justice, and making false statements to federal investigators, officials say.

Chinese smartphone maker ZTE has agreed to pay US$892 million to the USA government for illegally selling networking technology to Iran. ZTE will have ongoing compliance obligations, including agreeing to a 3-year corporate probation period, submitting to an independent corporate compliance monitor for review and reporting on ZTE's export compliance program, and cooperating fully with DOJ regarding any criminal investigation by United States law enforcement authorities.

From January 2010 to March 2016, the company shipped $32 million in U.S. cellular network equipment to Iran, and made 283 shipments of cell phones to North Korea, with the full knowledge of the highest levels of company management, officials told reporters.

According to the settlement, ZTE knowingly shipped $32 million of US-made technology to Iran over a six-year period.

To that end, ZTE's new Chief Export Compliance Officer, U.S. -based lawyer Matt Bell, added that the company is building a "global team" of compliance professionals, restructuring its legal department, and instituting new policies, training, and automated tools to keep current with ever-changing regulations.

U.S Attorney General Jeff Sessions said the plea agreement holds ZTE accountable.

U.S. Attorney General Jeff Sessions said in a statement the company violated sanctions that are created to "keep sensitive American technology out of the hands of hostile regimes like Iran's".

"Those who flout our economic sanctions and export control laws will not go unpunished", Ross said in a statement. "They will suffer the harshest of consequences".

"Under President Trump's leadership, we will be aggressively enforcing strong trade policies with the dual objective of protecting American national security and protecting American workers".

In addition there 283 shipments of controlled items to North Korea, US authorities said.

"ZTE acknowledges the mistakes it made, takes responsibility for them, and remains committed to positive change in the company", said Dr. Zhao Xianming, Chairman and CEO of ZTE Corporation. We have learned many lessons from this experience and will continue on our path of becoming a model for export compliance and management excellence.

Those changes included naming United States lawyer Matt Bell as chief export compliance officer in November.

  • Zachary Reyes