ZTE to pay $1.2 billion in fines to the U.S. for breaking sanctions
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Cheaters never prosper.
ZTE learned that the hard way after getting smacked with a $1.2 billion fine by the United States government. The Chinese company pled guilty to violating sanctions against North Korea and Iran. This fine marks the largest financial penalty in U.S. sanctions history.
The United States Department of Commerce claims that ZTE “conspired to evade” trade embargos against both Iran and North Korea, against whom America has steep trade sanctions. ZTE sold hardware made in the United States to both countries from 2010 to 2016, then attempted to hide the transactions from U.S. federal investigators. It wasn’t until the investigation team was able to seize a laptop from a member of ZTE’s legal team that the deceit was uncovered. ZTE will be forced to pay $892 million in fines immediately, with a possible $300 million in future penalties.
Wilbur Ross, the current Secretary of Commerce for the United States, said: “We are putting the world on notice: the games are over. Those who flout our economic sanctions and export control laws will not go unpunished - they will suffer the harshest consequences.” In response, ZTE chairman and Chief Executive Officer, Zhao Xianming, said: “ZTE acknowledges the mistakes it made, takes responsibility for them and remains committed to positive change in the company.”
ZTE isn’t the only Chinese phone company in the hot seat. Huawei, the largest handset manufacturer in the world, is currently under investigation by the Department of Commerce for selling devices to Iran, North Korea, Sudan, Syria, and Cuba, all of which are embargoed by the U.S.