ZTE settles with US on violating export controls, sanctions

ZTE, one of the largest telecom equipment manufacturers in China, announced on Tuesday that it was entering into a global settlement with the US government regarding its conduct relating to US export control and sanctions.

A statement by ZTE on Tuesday said the company agreed to a criminal and civil penalty of more than $892 million.

A US Commerce Department investigation followed reports in 2012 that ZTE had signed contracts to ship millions of dollars in hardware and software from some of the best-known US technology companies to Iran's largest telecoms carrier.

In March 2016, the Shenzhen-based company was placed on a list of entities that US suppliers could not work with without a license. ZTE acted contrary to US national security or foreign policy interests, the Commerce department said at the time.

The Commerce department will recommend that ZTE be removed from that list if the company lives up to its deal and a court approves its agreement with the Justice department, according to Reuters.

"ZTE acknowledges the mistakes it made, takes responsibility for them, and remains committed to positive change in the company," said Zhao Xianming, chairman and CEO of ZTE Corp, said in the 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. We are committed to a new ZTE, compliant, healthy and trustworthy," he said.

Zhao was named chairman and CEO of ZTE Corp in April 2016 with a mandate to lead a new ZTE with a best-in-class export compliance program.

"The agreements we reached will enable us to move forward in a stronger position than ever before," he said.

"ZTE has made tremendous progress in building a world-class compliance program and I look forward to working with others in the company's leadership to further build and improve our operations and processes," said Matt Bell, who was appointed chief export compliance officer in November 2016.

"Our global legal and compliance professionals will continue to work together to identify risk across the company and continually improve the effectiveness of our overall compliance program,"

The action marks the Treasury's Office of Foreign Assets Control's largest settlement to date with a non-financial entity, according to a Reuters report.

One of the world's biggest telecommunications gear makers and the fourth-largest smartphone vendor in the US, ZTE sells handset devices to US mobile carriers AT&T Inc, T-Mobile US Inc and Sprint Corp. It relies on US companies including Qualcomm, Microsoft and Intel for components.

chenweihua@chinadailyusa.com