Zhongxing Telecommunications Equipment Corporation Settlement of Civil and Criminal Charges for Violations of US Sanctions Against Iran

The World in U.S. Courts: Spring 2017 - International Trade/US Trade Sanctions | March.07.2017

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Zhongxing Telecommunications Equipment Corporation Settlement of Civil and Criminal Charges for Violations of US Sanctions Against Iran

Orrick's International Trade and Compliance Group has issued a client alert describing a USD 1 billion settlement between the US Government and a Chinese Telecom equipment manufacturer for alleged violations of US prohibitions on sales to Iran. The settlement reflects a "spectacular" assertion of extraterritorial scope for US sanctions and export control laws, one based on the alleged sale of non-U.S. origin products manufactured outside the United States by a non-US company due to its incorporation of US-origin components. The alert also describes the practical difficulties that companies face trying to resist claimed violations of US sanctions and export controls, and the "leverage" the Government can apply to extract settlements, even in cases where its theories may be subject to legitimate dispute. A copy of the alert may be found here.

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