The treasury said that if a federal court approves ZTE's "criminal plea", its settlement would include paying $430.5 million in fines and forfeitures to the United States department of justice and $661 million to the department of commerce, $300 million of which is suspended. It has been approved to pay an additional $ 300 million, suspended during a seven-year period, if it completes its part of the agreement, which comprises of independent compliance surveillance.
The ZTE has created strong partnerships with many US suppliers that supported almost 130,000 high-tech jobs, and it anticipated continued growth and business expansion over the next several years with its innovative leadership in 5G area, said Zhao Xianming, chairman and CEO of ZTE, in the statement.
Between January 2010 and January 2016, ZTE directly or indirectly shipped USA -origin items worth approximately $32 million to Iran without obtaining the proper export licenses from the US government.
The Commerce department 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, according to Reuters. They say ZTE purposely distributed about $ 32 million worth of US products to Iran and misinformed USA authorities on its compliance with American laws.
"Those who flout our economic sanctions and export controls will not go unpunished", Commerce Secretary Wilbur Ross said in a statement.
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 USA technology companies to Iran's largest telecommunications carrier.
As part of Tuesday's plea agreement, the Chinese company will continue to cooperate with USA authorities in investigations of any other violations of US export control laws. It is one of the world's biggest telecommunications companies with subsidiaries in the U.S., Asia, Europe and South America.
ZTE purchases about $2.6 billion worth of components a year from USA technology companies, according to a company spokesman.
The U.S. Departments of Commerce, Justice and the Treasury are scheduled to announce an enforcement action later Tuesday.
The settlement marks the largest civil fine ever imposed in a Commerce Department export control case.
According to a five-page criminal information charging document, ZTE tried to hide data regarding the illegal sales from 2013 to 2016 and then made false statements to the FBI that it was in compliance with federal law.