The US Department of Commerce (DOC) announced that it has removed ZTE Corp from the trade blacklist after the Chinese tech giant pleaded guilty to the allegations that it has exported tech goods from the country to Iran. The agency also revealed that ZTE settled for a fine amounting to a total of $892 million, and while the company has been removed from the blacklist, it will be kept under probation for three years while the investigation into its dealings continues.
The United States had trade restrictions preventing tech goods from being exported to Iran since the 1980s, but over the past six years, ZTE reportedly exported tech goods to the Middle Eastern country through US-based suppliers who were sending components and supplies to ZTE, later to be shipped to Iran. ZTE was added to the DOC’s trade blacklist last year after it was discovered that the company had allegedly shipped tech goods worth $32 million from the US to Iran in the aforementioned period. The ordeal led to heavy restrictions on goods sent by US-based suppliers to ZTE Corp, essentially halting ZTE stock trading in Shenzen and Hong Kong. Last year, China’s Foreign Ministry Spokesperson, Hong Lei, made an official announcement on the matter stating that China hopes the United States “stops this erroneous action and avoids damaging Sino-US trade cooperation and bilateral relations.” While there's a large gap between $32 million of exported goods and the $892 million fine ZTE was issued, US authorities reportedly said that the penalty wasn't only determined due to the violations themselves but also reflects the fact that ZTE executives have lied to the investigators when they were first approached in regards to these allegations.
Additionally, the report goes on to mention that although ZTE has now been officially removed from the U.S. trade blacklist, the DOC will impose severe restrictions on ZTE’s former Chief Executive Officer Shi Lirong, who has reportedly approved a written business plan in order to use shell companies to export US technologies to Iran in secrecy. While it remains to be seen how long will ZTE take to bounce back from this ordeal, an update on the situation will likely follow later this year.