The United States government is moving ahead with removing ZTE from a trade blacklist, the company’s CEO said on Wednesday. The US Department of Commerce’s Bureau of Industry and Security hit the Chinese company with a blockade after ZTE pled guilty to illegally transporting U.S.-origin products to Iran.
The case ended in an $892 million settlement and an additional $300 million dependent on whether ZTE complies with the terms of the agreement over the next seven years. The Justice Department said that ZTE included “dual-use goods” in equipment shipped to Iran despite knowing that the goods were on the Department of Commerce’s Commerce Control List.
“ZTE Corporation not only violated export controls that keep sensitive American technology out of the hands of hostile regimes like Iran’s – they lied to federal investigators and even deceived their own counsel and internal investigators about their illegal acts,” Attorney General Jeff Sessions said at the time of the guilty plea, in early March. “This plea agreement holds them accountable, and makes clear that our government will use every tool we have to punish companies who would violate our laws, obstruct justice, and jeopardize our national security.”
CEO Zhao Xianming acknowledged that ZTE had committed “a mistake,” and said that he was “focused on enacting positive change in our company.”
The company has replaced three senior executives after the trade sanctions, as well as creating a new compliance committee to keep an eye on U.S. laws. The goods shipped illegally to Iran were worth an estimated $32 million and were used to fulfill infrastructure contract projects, the Department of Justice said.
ZTE reported a $343 million net loss in 2016, in part due to fines levied in the case.
Filed Under: Industry regulations