ZTE has admitted to putting U.S.-made items into equipment that was then shipped to Iran without proper licensing. Subsequently, the company has agreed to pay a hefty settlement of over a billion dollars.
The settlement comprises a criminal and civil penalty of $892 million USD (about $1.1 billion CAD), along with an additional penalty of $300 million USD (about $400 million CAD) that will be suspended for a seven-year term on the condition that the company complies with the requirements in the agreement and will continue to work with an independent compliance monitor. The criminal fine is the largest ever handed out by the Justice Department in an export control or sanctions case.
According to court documents obtained by Bloomberg, ZTE, either directly or indirectly through a third company, shipped approximately $32 million USD (about $42 million CAD) of U.S. items to Iran between 2010 and 2016 without obtaining export licenses.
The U.S. Commerce Department blocked U.S. exports to ZTE in March 2016, but suspended the ban several times over. In a final rule published February 24th, the department extended the company’s temporary general license until March 29th, allowing U.S. suppliers to continue to supply ZTE with components.
“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 in a press statement.
“Instituting new compliance-focused procedures and making significant personnel changes has been a top priority for the company. We have learned many lessons from this experience and will continue on our path of becoming a model for export compliance and management excellence. We are committed to a new ZTE, compliant, healthy and trustworthy.”
According to Reuters, the Chinese manufacturer sources about one-third of its parts from American companies like chipset-maker Qualcomm, Microsoft and Intel.
Source: CNW
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