Chinese Company Fined $892 Million in the U.S. for Violating Iran Sanctions

The Chinese telecommunications equipment manufacturer ZTE announced on Tuesday that it has accepted its violations in selling U.S.-made equipment to Iran and agreed to pay a $892 million fine as part of a settlement with the U.S. Department of Commerce, Justice, and Treasury. According to Reuters, ZTE will acknowledge its wrongdoing in this agreement. None of the departments were willing to comment on the details of the settlement. The investigation by the Department of Commerce began after Reuters reports in 2012 revealed that ZTE had entered into contracts to sell millions of dollars worth of hardware and software produced by some of the most famous American computer companies to Iran's largest telecommunications company. Zhao Xianming, the CEO of ZTE, stated on Tuesday, "ZTE has acknowledged its mistakes, accepts responsibility, and will remain committed to positive changes within the company." This agreement ends a year of uncertainty regarding the company’s operations in the U.S. market. In March 2016, ZTE was placed on a list prohibiting American companies from cooperating or trading with it without special permission. At that time, the U.S. Department of Commerce stated that ZTE had acted contrary to U.S. national security or foreign policy. If the court approves this agreement with the Department of Justice and ZTE remains faithful to its commitments, the Department of Commerce will recommend that its name be removed from this list. ZTE has also stated that it has agreed to an additional $300 million fine from one of the branches of the Department of Commerce. According to the U.S. Treasury Department, $101 million of this financial settlement is related to Iran sanctions. This is the largest fine ever imposed by the Office of Foreign Assets Control on a non-bank institution. ZTE is one of the largest manufacturers and sellers of telecommunications equipment and the fourth-largest mobile phone seller in the U.S. market, sourcing parts from well-known American companies such as Microsoft, Qualcomm, and Intel.