China's ZTE to pay USD1.19 bn for violating Iran, NK sanctions

China's ZTE to pay USD1.19 bn for violating Iran, NK sanctions”

During that investigation, it found that ZTE was fully aware the company was violating USA law, but senior executives at the Chinese company still approved the scheme.

The company overall is worth about 60B yuan - about $8.7B.

Following the settlements, The Bureau of Industry and Security under the U.S. Commerce Department will recommend that the ZTE be removed from the Entity List, said the ZTE in its Tuesday statement. From 2010 to 2016, ZTE shipped about $32 million worth of US -developed products to the country, either directly or through a third party, the Justice Department said.

Since that March 2016 finding, Commerce has issued a series of temporary reprieves for ZTE from the sanctions.

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Shipped items included routers, microprocessors and servers controlled under export regulations for security, encryption and anti-terrorism reasons.

John Parker, U.S. Attorney for the Northern District of Texas, said ZTE "shockingly resumed" the illegal shipments to Iran during the investigation.

The settlement ends a five-year federal investigation into ZTE.

Last year, Commerce released internal documents showing senior ZTE executives instructing the company to carry out a project for dodging export controls in Iran, North Korea, Syria, Sudan and Cuba.

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The company on Tuesday agreed to a seven-year suspended denial of export privileges, which could be activated if there are further violations.

ZTE, which makes smartphones and sells related telecommunications equipment in Europe, Asia and the Americas, will pay the federal government over $892 million and agreed to pay an additional $300 million if it violates the terms of the settlement.

In addition to these monetary penalties, ZTE also agreed to active audit and compliance requirements created to prevent and detect future violations and a seven-year suspended denial of export privileges, which could be quickly activated if any aspect of this deal is not met, a media release said. The bulk of it-$661 million-would go to the Department of Commerce to settle the civil case, with the remainder going to the courts as criminal fines and forfeitures.

The penalties are among the largest ever imposed in a sanctions case.

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In addition to being one of the world's biggest telecommunications gear makers, ZTE is the No. 4 smartphone vendor in the United States, selling handset devices to USA mobile carriers AT&T Inc, T-Mobile US Inc and Sprint Corp.

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