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ZTE Pleads Guilty Over $1.19B Fine

Chinese smartphone player ZTE has plead guilty to the charge of violating trade sanctions filed by the US Commerce Department late last year.

As a result of the violations, made by shipping components to North Korea and Iran, the company will pay a record total of $1.19 billion in fines.

The commerce department asserted that “ZTE conspired to evade the long-standing and widely known U.S. embargo against Iran in order to obtain contracts with and related sales from Iranian entities, including entities affiliated with the Iranian Government, to supply, build, operate, and/or service large-scale telecommunications networks in Iran, the backbone of which would be U.S.-origin equipment and software.”

They also say that “ZTE engaged in evasive conduct designed to prevent the U.S. government from detecting its violations.”

The settlement agreement in the case will also require ZTE to submit to a 3-year probation period with an independent monitor verifying its export practices throughout.

While no individual has been charged, reports say ZTE had to let go of four employees to honor the agreement.

“Despite ZTE’s repeated attempts to thwart the investigation, the dogged determination of investigators uncovered damning evidence of an orchestrated, systematic scheme to violate U.S. export controls by supplying equipment to sanctioned destinations,” said Douglas Hassebrock, Director of the Bureau of Industry and Security’s Office of Export Enforcement.

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