Chinese manufacturer ZTE has announced that it has agreed to civil and criminal fines totaling nearly $1,192,360,064 with the Treasury and Justice departments of the US government and has publicized compliance measures it has made and will continue to make. The penalties are pending settlement approval from the Northern Texas District Court.
The company has been fighting the threat of trade restrictions that would have prohibited US companies from doing business with it, thus, strangling a large part of the mobile phone producer’s supply chain. It was revealed by Reuters that ZTE had sold equipment to companies and government-backed agencies in Iran and North Korea, violating US sanctions.
“ZTE acknowledges the mistakes it made, takes responsibility for them, and remains committed to positive change in the company,” said Dr. Zhao Xianming, chairman and CEO.
Zhao was hired by the company in April of last year, shortly after it was placed on the Commerce Department’s Entity List of trade-restricted companies, to lead compliance measures and cooperate with the ongoing federal investigation.
ZTE expects to be taken off of the Entity List once the plea agreement is approved and signed. A $300 million portion of the fines will be suspended for seven years to encourage compliance.
“We are putting the world on notice: the games are over,” said Wilbur L. Ross, Jr., Secretary of Commerce. “Under President Trump’s leadership, we will be aggressively enforcing strong trade policies with the dual purpose of protecting American national security and protecting American workers.”