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Tags: commerce | wilbur ross | zte | trade

Commerce's Ross: US Putting World on Notice That Improper Trade Gains Are Over


By    |   Tuesday, 07 March 2017 12:25 PM EST

Commerce Secretary Wilbur Ross warned the world that the United States will no longer tolerate "improper trade games" and will punish any nation it deems as a violator of the rules.

Ross spoke after Chinese telecom equipment maker ZTE Corp. agreed to plead guilty and pay $892 million to settle allegations it violated U.S. laws that restrict the sale of American-made technology to Iran and North Korea, the company and U.S. government agencies said on Tuesday.

"With this action, we are putting the world on notice. Improper trade games are over with," Ross told reporters Tuesday. He called ZTE's actions "a brazen disregard for our laws."

"Those who flout our economic sanctions and export control laws will not go unpunished," Ross said in a statement. "They will suffer the harshest of consequences," Ross said.

ZTE entered into an agreement to plead guilty to conspiring to violate the International Emergency Economic Powers Act, obstruction of justice and making a material false statement, the U.S. Justice Department said.

Ross told CNBC on Tuesday that cases like ZTE are a national security issues. He added that correcting trade violations is about not only strict enforcement but also following through on collecting fines that the U.S. imposes.

ZTE's settlement was made with Justice, the U.S. Commerce Department and the U.S. Department of Treasury.

The Commerce Department investigation followed reports by Reuters in 2012 that ZTE had signed contracts to ship millions of dollars worth of hardware and software from some of the best-known U.S. technology companies to Iran's largest telecoms carrier.

The original report can be read here.

"ZTE acknowledges the mistakes it made, takes responsibility for them, and remains committed to positive change in the company," ZTE Chairman and Chief Executive Zhao Xianming said on Tuesday in a statement.

Between January 2010 and January 2016, ZTE directly or indirectly shipped approximately $32 million of U.S.-origin items to Iran without obtaining the proper export licenses from the U.S. government. ZTE then lied to federal investigators during the investigation when it insisted that the shipments had stopped, Justice said.

It also took actions involving 283 shipments of controlled items to North Korea, authorities said.

Shipped items included routers, microprocessors and servers controlled under export regulations for security, encryption and anti-terrorism reasons.

The agreement caps a year of uncertainty for the Shenzhen-based company, which in March 2016 was placed on a list of entities that U.S. suppliers could not work with without a license. ZTE acted contrary to U.S. national security or foreign policy interests, the Commerce Department said at the time.

Commerce will recommend that ZTE be removed from that list if the company lives up to its deal and a court approves its agreement with the Justice Department.

The settlement includes a $661 million penalty to Commerce; $430 million in combined criminal fines and forfeiture; and $101 million paid to the Treasury’s Office of Foreign Assets Control (OFAC). The action marks OFAC's largest-ever settlement with a non-financial entity.

ZTE also agreed to an additional penalty of $300 million to the U.S. Commerce Department that will be suspended during a seven-year term on the condition the company complies with requirements in the agreement.

One of the world’s biggest telecommunications gear makers and the No. 4 smartphone vendor in the United States, ZTE sells handset devices to U.S. mobile carriers AT&T, T-Mobile US and Sprint. It relies on U.S. companies including Qualcomm, Microsoft and Intel for components.

Meanwhile, Ross also told CNBC that the United States is in the early stages of trying to change NAFTA. He said fixing NAFTA will help Mexico.

(Newsmax wires services the Associated Press, Bloomberg and Reuters contributed to this report).

© 2023 Newsmax Finance. All rights reserved.

commerce, wilbur ross, zte, trade
Tuesday, 07 March 2017 12:25 PM
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