ZTE Smacked By US Feds To The Tune Of $1.19 Billion

The news surfaced today that Chinese smartphone vendor ZTE is $1.19 billion lighter in the wallet today. Apparently they reached a settlement with the US Government because they got caught breaking sanctions and selling electronics to Iran and North Korea:

Starting no later than January 2010 and continuing through April 2016, ZTE conspired to evade the long-standing and widely known U.S. embargo against Iran in order to obtain contracts with and related sales from Iranian entities, including entities affiliated with the Iranian Government, to supply, build, operate, and/or service large-scale telecommunications networks in Iran, the backbone of which would be U.S.-origin equipment and software. 

As a result of the conspiracy, ZTE was able to obtain hundreds of millions of dollars in contracts with and sales from such Iranian entities.  Additionally, ZTE undertook other actions involving 283 shipments of controlled items to North Korea with knowledge that such shipments violated the EAR.

Shipped items included routers, microprocessors, and servers controlled under the EAR for national security, encryption, regional security, and/or anti-terrorism reasons.  In addition, ZTE engaged in evasive conduct designed to prevent the U.S. government from detecting its violations. 

Oh. I should also note that when the feds started looking into this, ZTE apparently lied to them. That never ends well. I’m pretty sure that this is also going to put a dent in ZTE’s attempts to get a bigger share of the smartphone market in the US as these optics will really suck. Here’s hoping that ZTE keeps their nose clean going forward because ticking off the US is likely not a good idea in this current political climate.

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