ZTE has agreed to pay $892.3 million to settle a US investigation into its alleged sale of networking equipment that uses US components to Iran, in contravention of US sanctions.
The company has also agreed to an additional penalty of $300 million that will be suspended during the seven-year term as long as ZTE complies with the requirements of its settlement agreement.
In a statement, ZTE CEO Dr Zhao Xianming said the company “acknowledges the mistakes it made, takes responsibility for them, and remains committed to positive change in the company.”
He said introducing new compliance-focused procedures has been a top investment priority for the company, with the company introducing new automated compliance tools and processes, an expanded export control compliance manual and global export controls training.
ZTE has also made a series of structural and personnel changes, including the establishment of a new compliance committee and the creation of a separate compliance department to take over the responsibilities for compliance from its legal department.
Personnel changes include the appointment of Zhao as chairman and CEO and the appointment of a new US lawyer and chief export compliance officer Matt Bell.
“We are grateful to all of our customers, partners, employees and stakeholders who have stood by us throughout this difficult time,” Zhao said.
“With this agreement behind us and our compliance program firmly established, we can confidently grow our business with suppliers, continue to provide innovative technology solutions to our partners, and execute our growth strategies as a new ZTE.”
ZTE was threatened with an export ban last year as part of an ongoing investigation from the US Department of Commerce into reports ZTE had supplied the Telecommunication Co of Iran with hardware and software from US technology companies in violation of US sanctions.