By Sijia Jiang

By Sijia Jiang


HONG KONG (Reuters) - Chinese telecom equipment maker ZTE Corp warned on Tuesday that penalties it expects to incur for allegedly breaking U.S. sanctions against Iran could impact its results.


In March, the U.S. government hit ZTE with some of the toughest-ever U.S. export restrictions for the alleged breaches. It has since issued temporary reprieves on the curbs, which are now due to take effect some time after Feb. 27.


"The company has been actively cooperating and communicating with relevant U.S. government departments in order to reach a conclusion of the investigation," ZTE said in a filing to the Shenzhen Stock Exchange.


"The outcome of the settlement issues still remains uncertain but will likely have a material impact on the financial conditions and operating results of the company."


Measures it has taken to placate Washington include a management overhaul and the appointment of a new chief export compliance officer based in the United States.

If no settlement or reprieve extension were reached before the deadline, U.S. suppliers would be banned from doing business with ZTE, which could cut off much of the Chinese company's supply chain. ZTE relies on U.S. suppliers for about one-third of its components.

(Reporting by Sijia Jiang; Editing by Stephen Coates)