Chinese telecom equipment maker ZTE Corp has agreed to pay $892 million and plead guilty to criminal charges for violating usa laws that restrict the sale of American-made technology to Iran and North Korea.
The treasury said that if a federal court approves ZTE's "criminal plea", its settlement would include paying $430.5 million in fines and forfeitures to the USA department of justice and $661 million to the department of commerce, $300 million of which is suspended.
Chinese smartphone maker ZTE has agreed to pay US$892 million to the USA government for illegally selling networking technology to Iran.
Shenzhen-based ZTE pleaded guilty to one count of conspiracy to unlawfully export, one count of obstruction of justice and one count of making false statements to federal investigators, according to the plea agreement filed in Dallas federal court.
ZTE used third-party companies to hide the export of United States components to the sanctioned countries, and "packaged the USA items with its own self-manufactured items to hide the US-origin goods", and did not include the U.S. items on the customs declaration forms.
Between 2010 and 2016, according to the treasury statement, the Chinese group's "highest-level management developed, approved and implemented a company-wide plan that utilised third-party companies to hide and facilitate ZTE's illegal business with Iran".
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 US authorities.
"The Department of Commerce is committed to ensuring U.S. and foreign companies regardless of size or location comply with our trade laws", Commerce Secretary Wilbur Ross told reporters. From 2010 to 2016, ZTE shipped about $32 million worth of USA -developed products to the country, either directly or through a third party, the Justice Department said.
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From January 2010 to March 2016, the company shipped US$32 million in USA 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. "Those who flout our economic sanctions, export control laws, and any other trade regimes, will not go unpunished".
Export privileges for ZTE - China's largest publicly traded telecom company, and the fourth largest in the world - are subject to denial for seven years "if any aspect of this deal is not met", the statement said. ZTE then repeatedly lied to and misled federal investigators, its own attorneys and internal investigators.
According to Bloomberg, the Commerce Department declared last March that it would ban US exports to the Chinese company amongst allegations that it resold goods to Iran in breach of USA authorizations.
The company said it was committed to making changes to become "a model for export compliance and management excellence".
The action marks the Treasury's Office of Foreign Assets Control's largest settlement to date with a non-financial entity, according to a Reuters report.
Xianming said ZTE is committed to being "complaint, healthy and trustworthy".
Under the extensions, U.S. suppliers have been able to continue to supply ZTE with software, technology and components despite the Commerce restrictions.