ZTE to pay $900 million for violating U.S. sanctions in Iran

ZTE Corporation （ZTCOF.PK） said that it has entered into a global settlement with the us government regarding its conduct relating to USA export controls and sanctions.

You can read the full announcements of this agreement from the US Department of Commerce and Department of Justice at the links below. The company will pay an additional $298 million for these North Korean shipments as well as other damages, adding up the the massive $1.19 billion bill. “Those who flout our economic sanctions and export control laws will not go unpunished”, Ross said in a statement.

The ban, however, was never put in place, and instead the Chinese company was given a series of reprieves.

The equipment included routers, microprocessors and servers controlled under export regulations for “security, encryption. and/or anti-terrorism reasons”.

In a Wednesday filing to the Hong Kong stock exchange, ZTE reported a net loss of $342 million in calendar year 2016 and said that, had it not been for the provisions for the U.S. penalties, its 2016 net profit would have risen 19 per cent.

The company said this agreement with US authorities paves the way for future growth strategies.

ZTE will no doubt feel the pinch if these fines are approved by the courts, as the Chinese company has found itself marred in scandal. “Trump’s leadership, we will be aggressively enforcing strong trade policies with the dual objective of protecting American national security and protecting American workers”, Ross said.

Although ZTE is based in China, the company incorporated USA -developed technology into its networking products and then sold them to Iran.

ZTE has replaced executives allegedly involved, including naming a new president.

In addition to the monetary penalties, ZTE has agreed to “active” audit and compliance requirements. A denial order would bar the receipt of USA origin goods and technology. ZTE faces an immediate fine of $892 million, and is on the hook for a further $300 million in future penalties, dependent on its compliance with the terms of the deal.

Xianming said ZTE is committed to being “complaint, healthy and trustworthy”.

“The company has taken an overhaul of its organisation and structure, business procedures and internal control”, Zhao said, adding the company had “taken necessary measures to ensure the company’s compliance with United States export laws and performance of its obligations under the agreements”.