The U.S. Commerce Department’s Bureau of Industry and Security (BIS) charged China’s largest cable and wire manufacturer Far East Cable with export control violations related to its alleged dealings with telecommunications company ZTE to circumvent U.S. restrictions against Iran.
Far East Cable from September 2014 through January 2016 aided and/or abetted violations of the Export Administration Regulations (EAR) on 18 occasions when it “served as a cutout” between ZTE and Iranian telecoms, the BIS stated in a press release Monday. During that period, ZTE was under investigation for EAR violations of its own that ultimately resulted in the Commerce Department levying a record fine of $1.19 billion against the company in March 2017.
The BIS alleged Far East Cable “signed contracts with ZTE and Iranian telecommunications companies to deliver U.S.-origin equipment to Iran as part of an effort to conceal and obfuscate ZTE’s Iranian business from U.S. investigators.”
The charging letter sent July 29 gives Far East 30 days to respond to the Commerce Department’s claims. Potential penalties that could be levied by the regulator include fines, denial of export privileges, or exclusion of practice before the BIS.
In the letter, the BIS details how Far East Cable signed contracts with Iranian telecommunications companies for the supply of equipment in three Iranian provinces. The deals did not reference ZTE, though the Iranian companies were “longtime customers” of ZTE and “had already signed contracts with ZTE under which ZTE built, operated, maintained, and/or supplied [their] telecommunications networks,” according to the BIS.
These dealings followed an agreement in December 2013 in which Far East Cable agreed to purchase telecommunications network equipment from ZTE, the letter stated. That deal was reached after the BIS had already begun investigating ZTE regarding its activities in Iran.
Far East Cable could not be reached for comment.