ZTE pleads guilty to violating U.S. sanctions

The Chinese company had made elaborate plans to hide its illegal activities. Only after the U.S. Department of Commerce threatened to cut off its global supply chain having presented ZTE evidence of its illegal activities did the company agree to a plea bargain.

Chinese telecom equipment manufacturer, ZTE Corp, has pleaded guilty in a U.S. federal court in Texas for conspiring to violate U.S. sanctions by illegally shipping U.S. technology and goods to Iran.

ZTE agreed to the guilty plea deal, earlier this month, after U.S. authorities slapped nearly $900 million in fines and other penalties.

U.S. District Judge Ed Kinkeade in Dallas has accepted ZTE’s plea to the three charges: making a material false statement, conspiring to export American-made items to Iran without a license and obstruction of justice.

Although China-based ZTE is based out of Shenzhen, it has a U.S. subsidiary in Richardson, Texas.

After conducting a 5-year investigation into ZTE’s illegal activities, U.S. authorities concluded that ZTE conspired to evade U.S. embargoes by buying U.S. components, incorporate them into ZTE equipment and illegally ship them to Iran.

In order to hide the illegal activity, ZTE had devised elaborate schemes. Only after the U.S. Department of Commerce threatened to cut off its global supply chain did ZTE agree to the plea bargain.

As part of the deal, ZTE will be placed under probation for a period of 3 years. The Chinese company has agreed to cooperate with authorities in any investigation of the company or third parties.

The judge has also appointed a former Texas judge to monitor ZTE’s compliance.

Additionally, ZTE has also agreed to pay $892 million in fines and penalties. In addition it is also staring at a potential penalty of $300 million, if it does not comply with the terms of the agreement with the U.S. Commerce Department over the next seven years.

Advertisements


Categories: Creativity, Entrepreneurship, HR & Organization, Regulations & Legal, Strategy

Tags: , , , , , , , , , , , ,

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: