ZTE reaches settlement with US authorities over export violation charges

Washington: Chinese telecom equipment maker ZTE Corp. said on Tuesday that it has reached settlements with US authorities over US export controls and sanctions charges.

The Chinese company has agreed to pay a criminal and civil penalty of about $892 million and an additional penalty of $300 million which will be suspended during a seven-year probationary period to deter future violations, Xinhua news agency quoted the ZTE as saying in a statement.

In order to improve its export control compliance, ZTE has appointed new CEO and made major changes to the senior management team, according to the statement. It also established a new compliance committee and strengthened export control compliance training and processes.

The settlement was reached with the Commerce Department, the Justice Department and the Treasury Department, said the US Commerce Department in a statement on Tuesday.

The US authorities claimed that ZTE and its affiliated entities have illegally shipped telecommunications equipment to certain countries in violation of the US regulations.

The Commerce Department in March 2016 added ZTE on the Entity List under the Export Administration Regulations. This move made it difficult for ZTE to acquire US products such as chips and software.

Following the settlements, The Bureau of Industry and Security under the US Commerce Department will recommend that ZTE be removed from the Entity List, said ZTE in its Tuesday statement.

ZTE has created strong partnerships with many US suppliers that supported nearly 130,000 high-tech jobs, and it anticipated continued growth and business expansion over the next several years with its innovative leadership in 5G area, said Zhao Xianming, chairman and CEO of ZTE, in the statement.

So far, ZTE has 14 offices and six research centres in the United States, with 80 per cent of the total 350 staff being Americans.

ZTE currently holds about 7 per cent of the US smartphone market, the fourth largest after Apple, Samsung and LG.