Chinese telecommunications giant ZTE Corporation has agreed to pay a total of US$1.9 billion as a penalty for violating US trade sanctions against Iran and North Korea.
A probe that lasted five years found that ZTE had evaded US embargoes by buying American components, incorporating them into its equipment, and sending them to Iran.
ZTE was also charged with sending 283 shipments of telecommunications equipment to North Korea.
The settlement with the US Commerce Department was reached while sanctions against ZTE were suspended.
{loadposition sam08}Had the sanctions come into play, ZTE would have lost access to crucial American components like Qualcomm processors. ZTE gets about 25% to 30% of the components it needs from US companies.
ZTE will also be under observation for three years as part of the deal, with an independent monitor to ensure that it does not indulge in any unlawful export practices.
The Chinese company had to let four employees go as part of the agreement, though none of them was held to be responsible for the sanctions busting.
"ZTE acknowledges the mistakes it made, takes responsibility for them, and remains committed to positive change in the company," said Dr Zhao Xianming, chairman and chief executive of ZTE.
"Instituting new compliance-focused procedures and making significant personnel changes has been a top priority for the company.
"We have learned many lessons from this experience and will continue on our path of becoming a model for export compliance and management excellence. We are committed to a new ZTE, compliant, healthy and trustworthy."