March 8 (UPI) -- China's ZTE Corp. will pay $892 million in penalties for violating U.S. sanctions by doing business with Iran, the Department of Justice announced.
The electronics manufacturing company, headquartered in Shenzhen, China, will enter a guilty plea in court and pay a $430 million penalty for conspiring to violate the International Emergency Economic Powers Act by illegally shipping items of U.S. origin to Iran, obstructing justice and making a material false statement. The company also reached settlement agreements with the U.S. Department of Commerce's Bureau of Industry and Security and the U.S. Department of the Treasury's Office of Foreign Assets Control. ZTE will pay the U.S. government a total of $892 million; BIS suspended an additional $300 million, which ZTE must pay if it violates its settlement agreement, a Justice Department statement issued Tuesday said.
Its total combined penalty, including the suspended payment, is $1.19 billion.
ZTE shipped cellphones to Iran through a third party between 2010 and 2016, and bid on Iranian cellular and landline infrastructure projects, which required U.S.-made components. The Justice Department statement said the company shipped equipment and parts to Iran, despite knowing the actions were illegal; lied to federal investigators; created an "elaborate scheme" to hide data from forensic accountants, and formed a "contact data induction team" of about 13 people to "sanitize the databases" of all information regarding sales to Iran from 2013 to 2016.
"ZTE Corporation not only violated export controls that keep sensitive American technology out of the hands of hostile regimes like Iran's, they lied to federal investigators and even deceived their own counsel and internal investigators about their illegal acts. This plea agreement holds them accountable, and makes clear that our government will use every tool we have to punish companies who would violate our laws, obstruct justice and jeopardize our national security," Attorney General Jeff Sessions said in the statement.
