China's largest listed telecom equipment maker ZTE said Tuesday night that it had reached a settlement with U.S. authorities over U.S. export controls and sanctions charges "in order to clear unstable factors in the global communications market."
The Chinese company has agreed to pay a criminal and civil penalty of about 892 million U.S. dollars and an additional penalty of 300 million dollars, which will be suspended for a seven-year probationary period to deter future violations.
Zhao Xianming, chairman and CEO of ZTE, said Wednesday that reaching the settlement with U.S. authorities could" secure ZTE a solid foundation to acquire more market opportunities."
He said that ZTE had established sound relations with its U.S. suppliers and created 130,000 high-tech jobs in the United States. Under a global partnership, ZTE expects continuous business growth and expansion in the years to come.
U.S. authorities had claimed that ZTE and its affiliated entities had illegally shipped telecommunications equipment to certain countries in violation of U.S. regulations.
The Commerce Department added ZTE on the Entity List under the Export Administration Regulations in March 2016. This made it difficult for ZTE to acquire U.S. products such as chips and software.
Following the settlement, the Bureau of Industry and Security under the U.S. Commerce Department will recommend that ZTE be removed from the list, according to a ZTE statement Tuesday.
ZTE currently holds about 7 percent of the U.S. smartphone market, the fourth largest after Apple, Samsung and LG. It currently has 14 offices and six research centers in the United States, with 80 percent of the total 350 staff being Americans.
ZTE on Tuesday issued its 2016 performance report, showing yearly revenue topping 101.2 billion yuan (14.6 billion U.S. dollars). Deducting fines triggered by the U.S. authorities' penalties and other losses, the company listed on both the Hong Kong and Shenzhen stock exchanges still secured 5.4 billion yuan profit in 2016, up 25.82 percent year on year.
Net income applicable to its common stockholders increased 19.24 percent to 3.8 billion yuan. The company also expects an increase between 21.21 and 31.65 percent in profits in the first quarter of 2017.
