A Chinese national flag and two flags bearing the name of ZTE fly outside the ZTE R&D building in Shenzhen, China April 27, 2016. REUTERS/Bobby Yip
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Chinese telecom equipment-maker ZTE Corp. has agreed to plead guilty and pay nearly $900 million in a U.S. sanctions case, drawing a line under a damaging scandal that had threatened to cut off its supply chain.A five-year investigation found ZTE conspired to evade U.S. embargoes by buying U.S. components, incorporating them into ZTE equipment and illegally shipping them to Iran. ZTE relies on U.S. suppliers for 25 to 30 percent of its components, many of which are key to its goods.It purchases about $2.6 billion worth of components a year from U.S. firms, according to a company spokesman. The investigation, spearheaded by the U.S. Department of Commerce, 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 Commerce Department will recommend ZTE be removed from a list of entities that U.S. firms cannot supply without a license if it lives up to its deal and a court approves its agreement with the Justice Department.
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