ZTE has announced that they have come to a settlement with the U.S. over the Iran sanctions, of which they have been granted multiple extensions on the sanction relief over the course of the last year. According to ZTE, they have reached an agreement with both the U.S. Department of Justice and the OFAC, although the DOJ agreement is still pending approval from the U.S. District Court for the Northern District Court in Texas, while the OFAC agreement has already been approved. What this means for ZTE is that they have agreed to pay $892,360,064 as a criminal and civil penalty, but in addition to this amount, they have also agreed to another penalty in the amount of $300 million to BIS which BIS will hold in suspension over a term of seven years as long as ZTE continues to comply with the rest of the conditions during that time that are part of the agreement.
This news comes just a few days after ZTE was reportedly going to be pleading guilty over these criminal charges of violating the U.S. Iran sanctions. At the time it was also rumored that ZTE's fines would be in the hundreds of millions, although exact amounts weren't mentioned during this initial report a few days ago. A statement from ZTE's newly appointed Chairman Dr. Zhao Xianming includes an acknowledgement that ZTE made mistakes an that they're committed to working to correct them to move forward through "positive changes" in the company.
In addition to transitioning Xianming into the CEO role for the company, ZTE has also taken numerous other steps to initiate its reforms that will allow them to stay in line with the compliance program that has been created, including setting up a Compliance Committee that will be led by Xianming. The company has also created a new Export Control Compliance manual that is designed to provide the necessary information to employees on these regulations, and each employee will also have to agree to a Compliance Commitment on an annual basis. ZTE also states that they have so far trained over 45,000 different employees on the various export controls and sanction laws throughout 2016, and they will continue to issue more training throughout 2017.