As noted recently, Secretary Ross activated the order of the denial previously suspended on April 15, 2018 based on the finding that ZTE made false statements to the BIS during settlement negotiations in 2016 and during its trial period in 2017. At the time of the agreement, ZTE paid $892 million in penalties and committed to dismiss four senior managers and discipline 35 others for their conduct in connection with previous sanctions violations. Instead, ZTE rewarded employees and executives involved in illegal behavior with bonuses. After identifying this violation of the agreed terms, LA BIS activated the refusal order, which was initially suspended as part of the 2017 transaction and was again placed on the BIS list of rejected persons, which largely prohibited anyone from cooperating with ZTE in export-related functions and transactions. WASHINGTON (Reuters) – ZTE Corp`s 000063.SZ deal with the U.S. Department of Commerce that would allow China`s No. 2 telecoms equipment maker to resume operations with U.S. suppliers was released on Monday, days after the company agreed to pay a $1 billion fine, review its leadership and meet other conditions. ZTE must replace the boards of two companies within 30 days, in accordance with a 21-part contract signed on June 8 and published Monday on the Ministry of Commerce`s website at the same time as the settlement agreement. A criminal case was filed today in federal court in the Northern District of Texas, in which ZTE is charged with one count of wilful and deliberate conspiracy for violation of the IEEPA, one count of obstruction of justice and one count of false physical testimony. ZTE waived the obligation to be charged by the federal indictment, agreed to file the information and took responsibility for its criminal conduct by denouncing a plea contract with the government.
The plea from the Tribunal`s compliant opinion requires ZTE to pay a fine of USD 286,992,532 and a criminal forfeiture of USD 143,496.266. The penalty is the highest fine for a continuation of the IEEPA. The government`s decision to rescind ZTE`s opt-out in exchange for the new conciliation agreement has drawn strong criticism from Congress, which has already introduced several changes to ZTE`s pending legislation in recent weeks. For example, Senator Chris Van Hollen (D-MD) recently tabled an amendment that was introduced in the Senate National Defense Authorization Act (NDAA) bill, which would prohibit President Trump from changing the sentences imposed on ZTE unless he certifies to Congress that ZTE has fully complied with U.S. law for a one-year period. And shortly after the Commerce Department announced the new settlement agreement, Senators Tom Cotton (R-AR), Van Hollen and Chuck Schumer (D-NY) made a bipartisan change to the NDAA, which would restore sanctions against ZTE as soon as the NDAA entered into law and require the president to make certain certifications before the sanctions were repealed.