YOU ARE AT:5GU.S. Department of Commerce removes ZTE from trade blacklist

U.S. Department of Commerce removes ZTE from trade blacklist

ZTE agreed to pay $1.19 billion in penalties for the illegal shipment of equipment to Iran and North Korea.

The United States Department of Commerce’s Bureau of Industry and Security removed ZTE from its trading blacklist after the China-based telecommunications equipment vendor agreed to settle an investigation over the sale of equipment with U.S. components to Iran and North Korea.

“Upon recommendation by BIS, the company and ZTE Kangxun Telecommunications Ltd will be removed from the Entity List on [March 29, 2017],” ZTE said in a statement to the Hong Kong Stock Exchange.

The Department of Commerce sanctioned ZTE by adding the firm to the “Entity List,” which created a license requirement to export, re-export or transfer to the vendor any items subject to the Export Administration Regulations.

Earlier this month, ZTE agreed to pay a combined civil and criminal penalty of $1.19 billion connected with illegally shipping telecommunications equipment to Iran and North Korea in violation of U.S. regulations. The company also agreed to audit compliance requirements to prevent and detect future violations, and operate under a seven-year suspended denial of export privileges, which could be activated if any aspect of the deal is not met.

The vendor said it made a series of structural and personnel changes, including the establishment of a new compliance committee and the creation of a separate compliance department, and that it had trained more than 45,000 employees on export controls, sanctions laws and company policies.

“By acknowledging the mistakes we made, taking responsibility for them and remaining focused on enacting positive change in our company, we are committed to a ZTE that is fully compliant, healthy and trustworthy,” said company CEO Zhao Xianming, on the news. “With this settlement behind us – and coupled with recent efforts to streamline operations and grow ZTE’s innovative leadership around 5G – we anticipate continued growth and business expansion over the next several years as we continue to work with our partners in the U.S. and around the world.”

Last year, the U.S. Department of Commerce introduced export restrictions on ZTE, though the vendor obtained a temporary general license allowing it to continue purchasing components from U.S. suppliers while the settlement was being reached.


Juan Pedro Tomás
Juan Pedro Tomás
Juan Pedro covers Global Carriers and Global Enterprise IoT. Prior to RCR, Juan Pedro worked for Business News Americas, covering telecoms and IT news in the Latin American markets. He also worked for Telecompaper as their Regional Editor for Latin America and Asia/Pacific. Juan Pedro has also contributed to Latin Trade magazine as the publication's correspondent in Argentina and with political risk consultancy firm Exclusive Analysis, writing reports and providing political and economic information from certain Latin American markets. He has a degree in International Relations and a master in Journalism and is married with two kids.

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