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ZTE pleads guilty to dodging Iran sanctions

The exterior of ZTE headquarters in Shenzhen, China. (Photo by Bloomberg)

China's telecommunications giant ZTE Corp has pleaded guilty in US federal court in Texas for shipping US goods and technology to Iran. 

The guilty plea was part of an agreement the company reached earlier this month with US authorities that envisaged paying as much as $1.2 billion to resolve allegations that it violated US laws restricting the sale of American technology to Iran.   

ZTE – China’s second biggest network equipment maker - also pledged as per the agreement to pay nearly $900 million in fines and other penalties and be subject to an additional $300 million in penalties if it violates the terms of the settlement. This was described by the media as the largest US criminal fine against a Chinese company.   

Reports said a federal judge in Dallas accepted and approved the plea deal on Wednesday.

Accordingly, the Chinese company had admitted to three charges: conspiring to export American-made items to Iran without a license from the US government, obstructing justice, and making a material false statement, Reuters reported.

The plea agreement ended a year of uncertainty about the ability of ZTE to do business in the world’s biggest economy, Bloomberg reported. 

A five-year investigation had found ZTE conspired to evade US embargoes by buying US components, incorporating them into ZTE equipment and illegally shipping them to Iran, Reuters reported.

ZTE, which devised elaborate schemes to hide the illegal activity, agreed to the guilty plea after the US Commerce Department took actions that threatened to cut off the gear maker's global supply chain, the news service added. 


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