MoneyNewsTop News

ZTE sanctioned by the United States for violating the Iranian embargo

UNITED STATES (OBSERVATORY) –┬áThe US Department of Commerce has imposed trade restrictions on the world’s fourth-largest telecom group, the Chinese giant ZTE, accused in March 2017 of “illegally re-exporting” US equipment to Iran through front companies.

About 30% of the products used in ZTE production come from American companies. However, in retaliation, they no longer have the right to sell their equipment to the Chinese giant who is now on the blacklist of the US Department of Commerce, identifying companies whose actions are “contrary to national security and the interests of foreign policy of the United States”.

A Texas federal court has accused the Chinese giant ZTE of “illegally re-exporting” equipment subject to US sanctions against Iran in violation of the embargo on that country.

To escape a lawsuit, ZTE, which sells smartphones in the United States, agreed to immediately pay a penalty of $ 892 million and will be fined $ 300 million over the next 7 years. case of new violation.

“If the company is not able to solve the problem, it will be excluded from trade with the United States and many banks and companies, even outside the United States, will no longer want to deal with it. Said Eric Hirschhorn, a former US Under Secretary of Commerce who was very involved in the case.

As part of an agreement, ZTE, based in Shenzhen, China, has promised to lay off four senior employees and punish 35 others by reducing their bonuses or reprimanding them, Commerce Department officials told Reuters. But Chinese society admitted in March to have dismissed the four executives, but did not sanction the other 35.

According to the restrictions imposed, American companies can not import directly or via another country chips and cell phones to ZTE.