Zhongxing Telecommunications Equipment Corporation (ZTE) agreed to pay a USD100 million settlement with the Office of Foreign Assets Control (OFAC), for violating the US Iran and North Korea sanctions regime. This settlement is part of a combined USD1,192 billion resolution, pending court approval, with other federal agencies. ZTE also agreed to a seven year suspended denial of export privileges, and to dismiss four senior officials who were involved in the violations.
This settlement is OFAC’s largest ever against a non-financial entity and it is the outcome of a five year long investigation into ZTE. During this investigation, OFAC found that from 2010 to 2016, ZTE’s high-management developed, approved, and implemented a company-wide plan that utilised third-party companies to circumvent the US Iran sanctions regime and conceal and facilitate ZTE’s illegal business with Iran. According to OFAC, ZTE had incorporated US components into its equipment and illegally shipped it to Iran. It was also found that ZTE made 283 shipments of controlled items, consisting of telecommunications equipment, to North Korea with knowledge that such shipments violated the EAR. ZTE is also said to have deleted evidence and provided altered information to US officials, in order to hide the fact that it was breaching the US Iran sanctions regime. This was after that ZTE had communicated to US officials that it had ceased its Iran-related transactions.
The official press release can be found here and the settlement agreement can be found here.