Chinese phone maker ZTE fined $1.2bn for breaching sanctions for shipping US-built equipment to Iran

 
Hayley Kirton
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ZTE recently had a stand at the Mobile World Congress (Source: Getty)

ZTE has been slapped with penalties totalling $1.2bn (£1bn) by the US authorities for sanctions breaches.

The Chinese phone maker pleaded guilty to shipping products containing US-produced equipment to Iran, which is a violation of US export rules, for almost six years. The US authorities had been probing export practices at the company for five years.

The firm has been told to pay the US government a total of $892.4m. The US Department of Commerce's Bureau of Industry and Security has suspended a further $300m fine, but the company could be told to fork this over as well if it is found to have broken the terms of its settlement agreement.

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"ZTE 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," said US attorney general Jeff Sessions.

"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 jeopardise our national security."

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Dr Zhao Xianming, chairman and chief executive of ZTE, commented:

ZTE acknowledges the mistakes it made, takes responsibility for them, and remains committed to positive change in the company. 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.

ZTE's plea agreement, which is still subject to sign off from the courts, ties the company to a three-year probation period, during which its export compliance programme will be overseen by an external monitor.

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