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Chinese kit maker in settlement talks with authorities over export control violations.
ZTE revealed on Tuesday it expects to be fined by U.S. authorities for selling network equipment to Iran, in violation of export controls.
In a statement, ZTE chairman Zhao Xianming said his company is currently negotiating a settlement with the Commerce Department, Department of Justice (DoJ), and the Treasury, "the outcome of which is expected to result in penalties…imposed on the company by relevant U.S. government departments."
Xianming said the final outcome of the settlement remains uncertain, "but will likely have a material impact on the financial conditions and operating results of the company."
Revelations about ZTE’s alleged illicit sales of network equipment to Iran emerged in March 2016.
A Commerce Department investigation accused ZTE of breaching laws banning the sale of U.S. technology to Iran. It was threatened with sanctions that would have made it harder for it to incorporate U.S.-made products, such as those made by the likes of IBM, Qualcomm and the like, into its equipment.
However, ZTE was later granted a temporary reprieve, giving it time to negotiate a settlement with the authorities.
Judging by ZTE’s announcement on Tuesday, it would appear as though that a deal is imminent.
ZTE "will make announcements of material development of the above matters as soon as practicable," Xianming said.
