ZTE Fined a Record $1.2B For Breaking US Sanctions
- Author: Jon Douglas Mar 09, 2017,
Mar 09, 2017, 0:06
A Chinese telecommunication firm has agreed to pay a combined civil settlement of 1.19 billion Dollars to multiple us government agencies for its participation in the trade of controlled goods with Iran and North Korea, the USA government announced on Tuesday.
China's second-largest telecommunications gear maker, has agreed to plead guilty and pay as much as $1.2 billion for violating USA laws restricting sale of American technology to Iran. "We are putting the world on notice: the games are over", Wilbur Ross, the commerce secretary, said.
Without key components from US technology companies, ZTE would have been at risk of needing to file for bankruptcy.
United States officials said on Tuesday the firm would immediately pay a massive fine of $892 million for flouting USA sanctions by shipping to Iran and North Korea.
ZTE, China's second-largest maker of telecoms equipment, has been hit by a record fine from the USA government.
ZTE says it acknowledges it has made mistakes, and is working towards improving its procedures.
According to Bloomberg, the Commerce Department declared last March that it would ban USA exports to the Chinese company amongst allegations that it resold goods to Iran in breach of US authorizations.
Dr Zhao Xianming, who was appointed chairman and CEO of ZTE in April past year, said the company acknowledges its mistakes and is committed to making changes.
The Commerce Department has been aware of ZTE's violations since a year ago, when it banned USA exports to ZTE over the issue.
The US Commerce Department is also investigating ZTE's larger Chinese rival, Huawei, for violating its sanctions on exporting or re-exporting of US technology to Cuba, Iran, North Korea, Sudan and Syria, all of whom are under US sanctions.
The smartphone and tablet maker is accused of shipping equipment using items made in the U.S.to Iran illegally, said the Justice Department.
An independent group will also monitor ZTE's compliance with USA export control laws for a probationary three-year period.
The company also said it had trained more than 45,000 employees on export controls and sanctions laws and company policies in 2016.
The agreement calls for the company to pay $892 million in fines and forfeitures and be subject to an additional $300 million in penalties if it violates the terms of the settlement.
Shares of China's ZTE rebounded sharply in the Hong Kong market Wednesday after the telecommunication equipment company announced it had reached a settlement with US government on its violation of a USA export ban. In a final rule published 24 February, the department extended the company's temporary general license until 29 March.