China's ZTE pleads guilty, settles with USA over Iran, NKorea sales

Mar 08, 2017, 00:20
China's ZTE pleads guilty, settles with USA over Iran, NKorea sales

ZTE will pay a combined penalty of $1.19 billion to the U.S. Commerce, Justice and Treasury departments.

The company "conspired to evade the long-standing and widely known United States embargo against Iran" and do business with entities affiliated with Tehran "to supply, build, operate, and/or service large-scale telecommunications networks" in the country using U.S. equipment and software.

They say ZTE purposely distributed about $ 32 million worth of USA products to Iran and misinformed US authorities on its compliance with American laws.

Shipped items included routers, microprocessors and servers controlled under export regulations for security, encryption and anti-terrorism reasons. ZTE acted contrary to USA national security or foreign policy interests, the Commerce department said at the time.

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 USA authorities.

In March 2016, ZTE was placed on a list of entities that USA firm could not supply without a license. The departments of Justice and Homeland Security started looking into reports of illegal conduct by ZTE in 2012.

Afghan family of five detained in United States despite valid entry visas
The attorneys said the family should not be separated or detained and are hoping the federal court will order their release. The Immigration and Customs Enforcement agency had no comment, other than to say it will comply with the judge's order.

As part of Tuesday's plea agreement, the Chinese company will continue to cooperate with US authorities in investigations of any other violations of USA export control laws.

The denial order is key to keeping ZTE in line, said Eric Hirschhorn, former Under Secretary at the Commerce Department, who was involved in the investigation.

In a recent statement, ZTE Chairmen and Chief Executive Zhao Xianming admitted to wrongdoing and stated that he is committed to making a positive change in the company.

ZTE also agreed to three years of probation, a compliance and ethics program, and a corporate monitor. ZTE acted contrary to US national security or foreign policy interests, the Commerce Department said at the time. "Instituting new compliance-focused procedures and making significant personnel changes has been a top priority for the company". Of the $892 million total, $101 million will be paid to the Treasury's Office of Foreign Assets Control, representing the office's largest settlement in history with a non-financial firm, according to Reuters.

ZTE Corporation, one of the world's largest telecommunications gear makers, pleaded guilty to signing contracts to sell hundreds of millions of dollars' worth of hardware and software from USA technology giants, including Microsoft, Intel and Qualcomm.