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  • Chris Bratton - Tech Journalist

ZTE called in the U.S. Court for allegedly breaking trade sanctions

Amongst the sanctions Russia is receiving, Chinese telecom ZTE is getting one of its own. ZTE is a Chinese telecom kit maker and supplier. They are called to the U.S. Court for allegedly breaking trade sanctions.

In 2017, ZTE supplied U.S. telecommunication gear to Iran and violated trade sanctions. The hearing came in a few days back, where ZTE pleaded guilty.

The original case on ZTE was charged five years back when the company shipped $32 million worth of US-made networking components to Iran. Features include routers, switches, mobile phone network equipment, and servers. There was a ban on shipping the products to that country at that moment. Still, the company used different subsidiaries for shipping the products. Sending that equipment to the Middle East without proper paperwork brought them the sanction.

The case of pleading guilty has been brought up after all this time. The court now has all the necessary paperwork to file procedures accordingly. A former ZTE employee was accused of conspiring to bring Chinese nationals to the U.S. illegally. According to other news outlets, this case doesn't concern the equipment shipping but is dreadful.

After that time, an accusation brought ZTE Corp., the Chinese telecom equipment maker, into the U.S. federal court. March 14 is marked as the day that ZTE will come forward in court and go through legal procedures. Since 2017, the company pledged guilty to illegally shipping tech equipment.

On the other hand, Texas federal court filed a March 4 briefing for conspiracy to commit visa fraud. When the scheme began, the last march on former ZTE research director in New Jersey and Georgia Institute of Technology professor bonded together in giving Chinese citizens a U.S. visa (J-1) for work and study. Their motive was to admit those people in institutes such as Georgia Tech. Professor Gee-Kung Chang has to plead not guilty after the alleged court filing. But the status of research director Jianjn Yu is still in the dark. ZTE is not charged for this case, as we mentioned above.

ZTE was given clear instructions on the sanction to ship telecom equipment overseas and unique to Arab countries. ZTE's lawyer, in response, was reasonably silent as powerful forces surrounded the case. But the fact remains clear that ZTE violated probations.

One investigation led to another; a second 238 telecom equipment shipments to North Korea were also discovered. ZTE agreed to the probation, but why they changed their mind in supply will be clear after the judge's ruling. According to Yahoo Finance, the U.S. Commerce Department in 2018 said ZTE lied about disciplining executives. As a result, they oversaw the probation and broke what facts on the contract. The U.S. government is unhappy about it as it poses security challenges to their equipment.

ZTE promised to pay $1 billion in damage and change leadership roles with a second 10-year monitor to lift the ban. But the U.S. will not let go of the fact ZTE ignored probation.

Texas court judge extended ZTE's probation period from the criminal case, and the second monitoring of two years is given. The deadline should end pretty quickly (March 22, 2022). Along with the sanction posed on the telecom equipment provider, they agreed to cooperate with the U.S. authorities as the market is too huge to ignore.

Secretary of State Antony Blinken talked about the U.S. considering a ban on Russian imports, causing the oil price to go higher. Similar threats are given to ZTE, and rules should be followed appropriately.

Still, what further actions will be taken against ZTE is unclear. Still, the alleged filings prove that ZTE supplies the same telecom equipment to Iran. According to the 2017 pledge, ZTE promised to pay $892 million (RM3.73 billion). More decision is on the wait to pass on Congress, and Mr Biden will give the final verdict along with committee chairs.


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