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China telecom firm ZTE removed from US trade blacklist

Technology

Washington - The US Department of Commerce will remove Chinese telecommunications equipment maker ZTE from a trade blacklist on Wednesday after the company pleaded guilty to violating sanctions on Iran and agreed to pay nearly $900 million, the agency said in a notice.

Removal from the list marks the end of a tense period for ZTE, which faced trade restrictions that could have severed its ties to critical US suppliers.

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A Chinese national flag and two flags bearing the name of ZTE fly outside the ZTE R&D building in Shenzhen, China

"By acknowledging the mistakes we made, taking responsibility for them ... we are committed to a ZTE that is fully compliant, healthy and trustworthy," said ZTE CEO Zhao Xianming said in an emailed statement.

Last year, the US Commerce Department placed export restrictions on ZTE as punishment for violating US sanctions against Iran. The restrictions would have prevented restricted suppliers from providing ZTE any US-made equipment, potentially freezing the Chinese handset maker's supply chain.

Over the past 12 months, as ZTE cooperated with US authorities, the US Commerce Department temporarily suspended the trade restrictions with a series of three-month reprieves, allowing the company to maintain ties to US suppliers.

Earlier this month, ZTE agreed to pay a total of $892.4 million and pleaded guilty to violating US sanctions by sending American-made technology to Iran and lying to investigators.

The Commerce Department said on Tuesday it would impose severe restrictions on former ZTE CEO Shi Lirong, whom the agency accused of approving efforts to skirt sanctions and ship equipment to Iran.

Read also: ZTE to plead guilty to evading US sanctions on Iran, N.Korea

The Commerce Department said Shi approved a systematic, written business plan to use shell companies to secretly export US technology to Iran. Reuters could not immediately reach Shi for comment.

The US investigation followed reports by Reuters in 2012 that ZTE had signed contracts with Iran to ship millions of dollars' worth of hardware and software from some of America's best-known technology companies.

US authorities have said the size of the financial penalty against ZTE also reflects the fact that the company lied to investigators when executives were approached about the allegations.

As part of the deal, ZTE will be under probation for three years and agreed to cooperate in the continuing investigation.

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