Analysis | China’s ZTE joins an unwanted club of US sanctions busters
US sanctions programme, an extension of the nation’s foreign policy, is given bite by the dominance of the US dollar in global finance, America’s stranglehold on the parts and software that are essential in technology products, and the size of the largest consumer market on earth
ZTE Corp, China’s largest listed telecommunications equipment supplier, earlier this month joined the unenviable fraternity of companies that paid stiff penalties after pleading guilty to breaching the United States’ longstanding sanctions on Iran and North Korea.
The company was slapped with a total penalty of US$1.2 billion on March 8, becoming the first technology company alongside some of the world’s largest banks as the biggest US sanctions busters to settle with Washington.
The US sanctions programme is an extension of the nation’s foreign policy. Its bite is reinforced by the dominance of the US dollar in global finance, America’s stranglehold on the parts and software that are essential in technology products, and by virtue of the US being the largest consumer market in the world.
“If an organisation wants to do business with the US or have any presence in the US, then violating sanctions can result in severe penalties,” said Paul Haswell, a partner at international law firm Pinsent Masons. “The US is such an important trading partner that compliance with its sanctions is something that all internationally competitive businesses have to follow.”
Some are broad-based and oriented geographically, which is the case for Iran and North Korea. Others are “targeted”, such as counterterrorism and cybersecurity-related sanctions, which focus on specific individuals and entities.
