ZTE Denied Export Privileges by Commerce Department for 7 Years

The Commerce Department Bureau of Industry and Security (BIS) denied export privileges to ZTE for seven years. Affiliated companies previously agreed to a combined civil and criminal penalty and forfeiture of $1.19 billion and a seven-year suspended denial (see 1703290058) because of sales of telecom equipment to Iran and North Korea and misleading the U.S. government. The denial, announced Monday, is because ZTE paid bonuses to employees involved in the sales and didn't reprimand them as claimed. "If the $892 million monetary penalty paid pursuant to the March 23, 2017 order, criminal plea agreement, and settlement agreement with the Department of the Treasury did not induce ZTE to ensure it was engaging with the U.S. government truthfully, an additional monetary penalty of up to roughly a third that amount ($300 million) is unlikely to lead to the company's reform," said BIS. The company didn't comment Tuesday.