ZTE agrees to pay $1.19 billion record fine for selling goods and services to Iran and North Korea

ZTE agrees to pay $1.19 billion record fine for selling goods and services to Iran and North Korea
Huawei and ZTE have been banned from selling their products and services to U.S. government back in 2013, but while the ban was lifted for the former, the latter remained under scrutiny.

U.S. government agencies found that telecoms equipment from the Chinese companies posed a national security risk. On top of that, authorities in the United States have been investigating ZTE since 2012 over allegations it sold software and equipment made in the U.S. to Iran.

ZTE won U.S. government's mercy after a series of talks with Washington officials, and the company was allowed to export some supplies until June 30, 2016. The agreement was prolonged earlier this year and culminated with today's announcement coming from Secretary of Commerce Wilbur L. Ross, Jr.

After five years of investigations, U.S. authorities have found enough evidence that ZTE has indeed violated trade agreements and sold equipment and services to Iran and North Korea. The statement issued today confirms ZTE has agreed to settle the dispute with the U.S. government by paying a $1.19 billion record fine, pending approval from the courts.

This is the largest penalty ever imposed by the Bureau of Industry Security and, if approved by a federal judge, would be the largest fine ever levied by the U.S. government in an export control case.

ZTE Axon 7 Mini

ZTE Axon 7 Mini


According to the report released today by U.S. authorities, starting January 2010 and continuing through April 2016, ZTE managed to evade U.S. embargo against Iran, which allowed the Chinese company to gain contracts worth hundreds of millions of dollars.

ZTE has agreed to supply, build, operate and service telecom networks in Iran. Moreover, most of the equipment shipped to Iran was manufactured in the United States. 


The Chinese company was also involved in shipping controlled items to North Korea even though it knew these shipments would violate U.S. trade agreements. The shipped items included routers, microprocessors, as well as servers.

To make things worse, ZTE has tried to hide its actions from the U.S. authorities, as well as its own accounting firm. Even though ZTE will probably be allowed to continue to sell its products in the U.S., the decision announced today will negatively affect customers' confidence in the Chinese brand.

source: Commerce.gov

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18 Comments

1. Arch_Fiend

Posts: 3944; Member since: Oct 03, 2015

Damn! Just.....Damn!!!

2. jellmoo

Posts: 2533; Member since: Oct 31, 2011

Well... I guess ZTE won't be able to afford to keep updating my Axon 7. Dang.

3. Mreveryphone

Posts: 1794; Member since: Apr 22, 2014

Had the Axon 7 in my hand at Best Buy and something was telling me not to buy it... The price seemed to good to be true...

4. kiko007

Posts: 7491; Member since: Feb 17, 2016

Learned my lesson with its predecessor, the Axon Pro. Wish more people could understand that just because something is "affordable" doesn't make it better than the best. Period.

5. NarutoKage14

Posts: 1306; Member since: Aug 31, 2016

Don't buy Chinese products. I've been saying that for a long time.

6. fyah_king unregistered

Especially the one that's manufactured in China.

7. kiko007

Posts: 7491; Member since: Feb 17, 2016

Please don't preach that.

10. NarutoKage14

Posts: 1306; Member since: Aug 31, 2016

Let me rephrase that. Don't buy Chinese branded products without doing some research. Several Chinese made mobile devices have been found to send your data back to sketchy Chinese servers. Many other Chinese products have been found to be contaminated in some way and sometimes by the manufacturer itself.

11. kiko007

Posts: 7491; Member since: Feb 17, 2016

That is definitely more understandable. Are you referring to the Blu scandal or the recently found Xiaomi backdoor? Either one is scary honestly.

8. youling

Posts: 11; Member since: Sep 18, 2015

So u tell me how to buy a electronic products(include elements) which is not made in China.

13. iushnt

Posts: 3062; Member since: Feb 06, 2013

He I specifically saying "which is not designed in China"

9. joey_sfb

Posts: 6794; Member since: Mar 29, 2012

There are good reason to stay away but still it would be on a case to case basis not a blanket generalisation.

16. DoggyDangerous

Posts: 1028; Member since: Aug 28, 2015

I love Chinese phones and will keep buying it. US has NSA, so should we boycott US products?

12. XperiaFanZone

Posts: 2277; Member since: Sep 21, 2012

that hands on collar guy is missing from this article. I wonder why

14. trojan_horse

Posts: 5868; Member since: May 06, 2016

ZTE finally got busted by the US authorities. Serves the Chinese scum right!

15. liberalsnowflake

Posts: 273; Member since: Feb 24, 2017

Trump mission accomplished

17. MOTOREZOID

Posts: 121; Member since: Jul 21, 2015

I never saw a ZTE phone in hands of people here in Iran , so you can fine them as much as you want, but hey, wait a minute, what about iPhones that sell like cupcakes here? Do you want to punish Tim Cook? BTW I'm on my 5th Motorola phone right now , just please don't punish them. LOL!

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