ZTE fined $1B by the US Government
Lesson learned, don't break trade laws
Posted on June 8, 2018 12:07 AM.
CNBCBerkely Lovelace Jr.
Commerce Secretary Wilbur Ross says the U.S. has struck a deal with Chinese telecom giant ZTE to end crippling American sanctions.
The root of all of this? ZTE sold telecom equipment to North Korea and Iran, which was in violation of the US’s Export Administration Act of 1979.
CNBCBerkely Lovelace Jr.
ZTE paid $1.19 billion in fines for those violations, but the dispute didn't end there. The Commerce Department then alleged that ZTE misled regulators and failed to discipline the employees responsible for the sanction breach. The settlement deal includes $400 million in escrow to cover any future violations as well as requiring ZTE to change its board of directors and executive team in 30 days.
Prior to the fine, the US instituted a trade ban on ZTE, which banned ZTE from purchasing US-made parts but politicians were worried about threatening the survival of ZTE. Reviews on the new penalty are mixed, some citing concerns to national security.
According to Ross, this is “the strictest and largest settlement fine that has ever been brought by the Commerce Department against any violator of export controls.”

Interested in product and tech related news? Check out the Sip News app by Product Hunt. Every weekday, Sip surfaces the most exciting and essential tech stories of the day. You can download it now for iOS or Android.