ZTE Enters Guilty Plea To Conspiracy, Obstruction In China

Chinese telecom manufacturer ZTE has entered a guilty plea in a federal case concerning some of its recent global deals. ZTE was charged with conspiracy to export U.S. manufactured products without a license after selling goods to Iran despite an ongoing sanction. ZTE was also charged with obstruction of justice and falsifying statements. In direct violation of the U.S. sanctions, ZTE shipped products manufactured in the United States to Iran and used elaborate evasion methods to deliberately circumvent the sanction and avoid detection. After reaching a resolution with U.S. authorities, ZTE was ordered to pay $829 million in fines along with other stipulations such as a three-year probation period. The case was heard in Dallas, Texas and was presided over by United States District Judge Ed Kinkeade who ordered that ZTE's compliance with authorities in further investigations be monitored.

The investigations into ZTE lasted five years and ultimately resulted in charges after authorities determined that the company deliberately circumvented U.S. embargoes in violation of current sanctions. Hardware and software products manufactured in the U.S. were purchased by ZTE and then incorporated into their products which were sold to Iran. When the Department of Commerce began to take actions that would have damaged the company's global supply chain, the company pled guilty to the charges.

U.S. authorities were tipped off by reports of ZTE signing contracts that would result in large amounts of products being shipped to Iran. ZTE is required to complete three years of probation and to cooperate with authorities during investigations into the company and those it is doing business with.  After reaching agreements with the U.S. Department of Justice, the Department of the Treasury and the Commerce department, ZTE is expected to meet all requirements or it will be fined an additional $300 million.

Zhao Xianming, chairman and chief executive of ZTE released a press release acknowledging the company's mistakes and taking responsibility for them. Xianming also explained that the company is committed to making the necessary changes to ensure that these mistakes aren't repeated. ZTE has reportedly made changes to the company's leadership in response to these events.

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