Chinese giant ZTE has been fined $900m by the US government for skirting trade blocks by selling comms hardware to Iran.
Today in a Texas district court, ZTE pleaded guilty to busting sanctions, obstructing justice, and lying to investigators. The corp has also settled out of court with the US Department of Commerce, and the treasury department. The fine will be split between these two departments and the Department of Justice.
The Chinese goliath will have to cough up a further $300m if it flouts the terms of its settlement within the next seven years.
ZTE was charged in 2016 with violating US trade sanctions on Iran by shipping $32m worth of American-made components for routers, switches, servers, and mobile phone network equipment parts to Iran through various China-based subsidiaries, and then covering up the dealings by lying to officials.
Sale of the parts to Iran had been banned under the International Emergency Economic Powers Act. ZTE was also accused of supplying banned components from the US to North Korea in a separate incident.
The guilty plea and settlement comes after a five-year investigation by the US government into ZTE's dealings with Iran. Last year, the government slapped a formal trade ban on the company.
"ZTE engaged in an elaborate scheme to acquire US-origin items, send the items to Iran, and mask its involvement in those exports. The plea agreement alleges that the highest levels of management within the company approved the scheme," said US assistant attorney general Mary McCord. "ZTE then repeatedly lied to and misled federal investigators, its own attorneys and internal investigators. Its actions were egregious and warranted a significant penalty."
In addition to a $900m fine that could balloon to $1.2bn, ZTE has agreed to cooperate with US authorities in any further investigations, including those into possible criminal wrongdoing by individuals at ZTE and its subsidiaries.
"ZTE acknowledges the mistakes it made, takes responsibility for them, and remains committed to positive change in the company," CEO and chairman Dr Zhao Xianming said in a canned 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." ®