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Telstra/Optus Partner ZTE Freed From US Probation

Chinese technology giant ZTE has been under American government supervision for five years, following major violations of US sanctions on Iran.

A federal judge in Texas has called an end to ZTE’s probational period, effectively allowing the company to begin selling its equipment in the US, where it was previously deemed a security threat.

ZTE is the world’s fourth-largest maker of telco equipment. It has built major 5G networks in China, and manufactures various handsets for Telstra and Optus in Australia.

In his ruling, U.S. District Judge Ed Kinkeade said ZTE had improved its compliance practices, while noting its “record of compliance can be summarized in one word: ‘sometimes.’”

After the ruling Tuesday, Shenzhen-based ZTE said that it would commit to a “comprehensive compliance system” as it moved to restart sales in the US

“The company has full confidence in the effective operation and continuous improvement of the compliance management system,” the company said.

In 2017, ZTE agreed in a settlement to pay A$1.2 billion, after admitting to “orchestrating a six-year conspiracy to acquire U.S. technology, send it to Iran and mask its involvement through a network of front companies,” according to WSJ.

The following year, the Trump administration accused ZTE of breaching the settlement, and placed the company on the export blacklist, slapping them with an additional A$1.3 billion fine, and ordering them to replace its senior leadership.

Despite getting the all-clear in Texas, ZTE will still be under compliance watch for a further six years.

ZTE shares in Shenzhen rose 10 per cent, hitting their trading limit, while shares in Hong Kong surged 27 per cent.

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