ZTE to resume operations after agreeing to pay USD1.4bn and replace its board

13 Jun 2018

China’s second largest telecoms equipment maker ZTE has agreed to pay USD1.4 billion in total penalties, including a lump sum of USD1 billion and a suspended penalty of USD400 million, plus replace its board, in order to resume its main business operations after it was blocked from buying US components in April for transgressing US sanctions on trading with Iran and North Korea. Bloomberg reports that the entire boards of parent ZTE and subsidiary ZTE Kangxun will be replaced, alongside the removal of all current members of senior leadership at both companies. ZTE will also submit nine audit reports of its compliance with US export control laws. The report adds that ZTE is likely to incur total losses of at least USD3 billion as a result of the US action, whilst US lawmakers are currently debating further potential sanctions on the Chinese vendor.

China, ZTE