Chinese telecommunications equipment maker ZTE Corp has agreed to plead guilty and pay $892 million to settle with U.S. authorities over allegations it violated U.S. laws restricting the sale of American-made technology to Iran, the company said on Tuesday.
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ZTE will plead guilty to conspiring to violate the International Emergency Economic Powers Act, among other charges, in the agreement with the U.S. Department of Commerce, Department of Treasury and Department of Justice.
The agencies all declined comment on Tuesday.
The Commerce Department investigation followed reports by Reuters in 2012 that ZTE had signed contracts to ship millions of dollars worth of hardware and software from some of the best-known U.S. technology companies to Iran's largest telecoms carrier.
The original report can be read here: goo.gl/rvNwr6.
"ZTE acknowledges the mistakes it made, takes responsibility for them, and remains committed to positive change in the company," ZTE Chairman and Chief Executive Zhao Xianming said on Tuesday in a statement.
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An agreement caps a year of uncertainty for the Shenzhen-based company, which in March 2016 was placed on a list of entities that U.S. suppliers could not work with without a license. ZTE acted contrary to U.S. national security or foreign policy interests, the Commerce Department said at the time.
Commerce will recommend that ZTE be removed from that list if the company lives up to its deal and a court approves its agreement with the Justice Department.
ZTE said it has agreed to an additional penalty of $300 million to a division of the Commerce Department that will be suspended during a seven-year term on the condition that the company complies with requirements in the agreement.
The Treasury Department said the settlement includes $101 million to settle potential civil liability for Iran sanction violations. The action marks the Treasury’s Office of Foreign Assets Control's largest settlement to date with a non-financial entity.
One of the world’s biggest telecommunications gear makers and the No. 4 smartphone vendor in the United States, ZTE sells handset devices to U.S. mobile carriers AT&T Inc, T-Mobile US Inc and Sprint Corp. It relies on U.S. companies including Qualcomm, Microsoft and Intel for components.
(Reporting By Karen Freifeld; Writing by Nick Zieminski; Editing by Chizu Nomiyama and Meredith Mazzilli)