ZTE to Enter Guilty Plea, Will Pay Nearly $900 Million to US for Shipments to Iran

Chinese multinational ZTE will plead guilty and pay $430.5 million to the U.S. government for illegally shipping U.S.-origin wireless and wireline infrastructure hardware to customers in Iran for almost six years, obstruction of justice, and “making a material false statement,” DOJ announced. In total, ZTE will pay the government $892.4 million, under the impending guilty plea and settlement agreements reached with the Commerce Department's Bureau of Industry and Security (BIS) and Treasury's Office of Foreign Assets Control, DOJ said. BIS suspended another $300 million in penalties, which ZTE will pay if it breaches its settlement with the agency, DOJ said. ZTE lied to federal investigators and “deceived their own counsel and internal investigators” about the illegal acts, Attorney General Jeff Sessions said in a statement. An independent corporate compliance monitor will review and report on ZTE’s export compliance program over the next three years, during which the company will remain on corporate probation, according to DOJ’s announcement. “Criminal information” filed March 7 in federal court in the Northern District of Texas charged ZTE with one count of “knowingly and willfully” conspiring to violate the International Emergency Economic Powers Act, and one count each of obstructing justice and making a material false statement. ZTE then signed a plea agreement with the government, which the court must still approve, DOJ said. BIS four times extended the original June 30, 2016, deadline for a temporary general license for ZTE that maintains normal licensing requirements for exports, re-exports and in-country transfers to ZTE and ZTE Kangxun (see 1702230001), after announcing sanctions against the two entities and two affiliated firms on March 8, 2016 (see 1603070001). The current temporary general license expires March 29.