The United States Commerce Department accused China’s top wire and cable manufacturer, Far East Cable Co., of violating its export controls by assisting a China-based telecommunication company in delivering restricted technology to Iran.

The Commerce Department stated in its charging letter that Far East Cable previously signed a contract with ZTE Corp. in the early 2010s to conceal business transactions with Iran that relied on US-origin routers and microprocessors—subsequently accumulated at least 18 violations between September 2014 and January 2016.

“Bureau of Industry and Security (BIS) Office of Export Enforcement (OEE) Director John Sonderman issued an administrative Charging Letter against Far East Cable on July 29, 2022, alleging violations of the Export Administration Regulations (EAR) for causing, aiding, and/or abetting violations of the EAR. From September 2014 to January 2016, Far East Cable served as a cutout between the Zhongxing Telecommunications Equipment Corporation (“ZTE”), which was under investigation by the U.S. Government for EAR violations at the time; and Iranian telecommunications companies.”

Reuter reported that far East Cable began working with ZTE while the latter was under the microscope of the US authorities, serving as a substitute middle man to evade the export control rules and resume shipments.

After sending the charging letter last Tuesday, the bureau has yet to receive a response from Far East Cable and has only 30 days to do so.

ZTE got in muddy water in 2017 after the US Commerce Department discovered that it had been shipping goods along with American-made technology to Iran, violating US laws. Additionally, ZTE admitted to obstructing justice after executing an elaborate scheme to sweep its illicit business with Iran under a rag.

ZTE doing business with Iran
(Image source: @Light_Reading/Twitter)

When this was announced in 2018, ZTE was barred from acquiring equipment from American companies like Qualcomm, which supplied 25-30 percent of the components used in making its devices. However, the Trump administration lifted the ban after ZTE agreed to pay a combined penalty of $1.19 billion in criminal and administrative fines and undergo a management overhaul.

“This action reflects the Commerce Department’s commitment to enforce our laws vigorously against those involved in a scheme to disguise the true parties to a transaction,” said Assistant Secretary of Commerce for Export Enforcement Matthew S. Axelrod. “We have no tolerance for companies that subvert our rules – either on their own behalf or on behalf of others.”