Zte Settlement Agreement 2018

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  • 16 Aprile 2021

On Thursday, June 7, 2018, U.S. Commerce Secretary Wilbur Ross announced that the government has reached a “final agreement” with Chinese telecommunications and information technology company Zhongxing Telecommunications Equipment Corporation, Shenzhen, China (“ZTE Corporation”), to amend and replace the current order of the U.S. Department of Commerce (DOC). The current refusal settlement, the Doc`s Bureau of Industry and Security (BIS) of April 15, 2018 (April 15, 2018 against ZTE Corporation and ZTE Kangxun Telecommunications Ltd. (ZTE Kangxun) (“ZTE Kangxun”) excluded ZTE from the U.S. supply chain for a period of seven years, as ZTE failed to comply with agreed conditions regarding past illegal sales of ZTE to Iran and North Korea. The nature of recent ZTE sanctions continues to demonstrate the robust use of administrative authorities such as the denial order as powerful instruments to promote compliance with export controls, economic sanctions and comparisons with regulators. The replacement agreement also shows the significant consequences that companies that violate the terms of the transaction agreement with civil agencies, including senior executives and corporate boards, can have. On 1 June, Reuters exclusively reported on the fine and other conditions required to overturn the ban. Reuters reported on Tuesday that ZTE had signed a preliminary agreement with the Commerce Department. U.S.

Commerce Secretary Wilbur Ross said the 10-year opt-out order suspended, Treuhand`s $400 million and the new compliance coordinator will allow the U.S. Department of Commerce to effectively monitor and enforce the current transaction agreement with ZTE to advance U.S. national security interests. According to the Department of Commerce, such measures set a new precedent for surveillance to ensure compliance with U.S. law. Under the settlement, ZTE will pay a total civil fine of $1.7 billion, including $361 million already paid under a March 2017 agreement, the $1 billion fine and $400 million in trust. In June 2018, following discussions between President Trump and the Chinese government, the BIS announced a settlement agreement (previously described) anticipating the lifting of ZTE`s refusal order in exchange for additional fines and enhanced compliance measures.