Treasury Warns on Iran Sanctions Despite Trump's ZTE Reversal

(Bloomberg) -- The U.S. Treasury Department’s top sanctions official warned that any company violating restrictions on doing business with Iran will face serious consequences, even as President Donald Trump signals he may ease penalties on China’s ZTE Corp., which a year ago pleaded guilty for engaging in prohibited activity with the Islamic Republic.

“We will hold those doing prohibited business in Iran to account,” Sigal Mandelker, Treasury undersecretary for terrorism and financial intelligence said in a speech in Washington. “Countries and companies around the world need to be on full alert to the surreptitious means the Iranian regime uses to exploit the international financial system to fund its malign activities and terrorist proxies.”

Trump since Sunday has indicated that telecommunications equipment-maker ZTE could face relief from a seven-year ban on purchase of crucial American technology the U.S. imposed on it last month for violating the terms of a sanctions settlement.

In 2017 ZTE agreed to pay as much as $1.2 billion after pleading guilty to shipping U.S.-origin products to Iran in violation of U.S. laws restricting the sale of American technology to the country. It was the largest criminal fine for the Justice Department in an export control or sanctions case.

The Commerce Department determined ZTE, which was previously fined for shipping telecommunication equipment to Iran and North Korea, subsequently paid full bonuses to employees who engaged in the illegal conduct, failed to issue letters of reprimand and lied about the practices to U.S. authorities, the department said in its April ruling.

Trump last week left the Iran nuclear deal and said he would reimpose sanctions on the regime.

Trump shocked many in Washington with a tweet Sunday that he was working with Chinese President Xi Jinping to give ZTE “a way to get back into business, fast.” Trump said "too many jobs in China" had been lost and that his Commerce Department "has been instructed to get it done!"

To contact the reporter on this story: Saleha Mohsin in Washington at smohsin2@bloomberg.net.

To contact the editors responsible for this story: Alex Wayne at awayne3@bloomberg.net, Mike Dorning, Joshua Gallu

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