Zte Bis Settlement Agreement
A Commerce Department press release states that the termination order was issued after ZTE fulfilled its obligations to pay a $1 billion fine and file $400 million under the replacement settlement agreement. These amounts are in addition to the $361 million fines ZTE has already paid to the BIS under the original Settlement Agreement of March 2017, and together, these payments represent the largest civil penalty for violations of U.S. export controls. The replacement settlement agreement also requires ZTE to hire an external compliance coordinator who will be accountable to the BIS for a period of ten years to monitor and report on ZTE`s compliance. If there is evidence of further non-compliance by ZTE during this ten-year period, ZTE will lose the deposited funds and the BIS may activate another rejection order suspended for a period of ten years. “Not only did ZTE Corporation violate export controls that keep sensitive U.S. technology out of the hands of hostile regimes like Iran — they lied to federal investigators and even deceived their own internal advisers and investigators about their illegal actions,” Attorney General Sessions said. “This agreement holds them accountable and makes it clear that our government will use all the tools at our disposal to punish companies that violate our laws, obstruct justice and endanger our national security. I am grateful to the National Security Division of the Department of Justice, the U.S. Attorney`s Office for the Northern District of Texas, and the FBI for their excellent work in this investigation. ZTE Corporation agreed to plead guilty and pay a fine of $430,488,798 in the United States for conspiring to violate the International Emergency Economic Powers Act (IEEPA) by illegally shipping goods originating in the United States to Iran, obstructing justice and making a material misrepresentation. ZTE has simultaneously entered into settlement agreements with the U.S. Department of Commerce`s Bureau of Industry and Security (BIS) and the U.S.
Department of the Treasury`s Office of Foreign Assets Control (OFAC). In total, ZTE agreed to pay the U.S. government $892,360,064. The BIS has suspended an additional $300,000,000 that ZTE will pay if it violates its settlement agreement with the BIS. The plea agreement, which is subject to court approval, also requires ZTE to undergo a three-year corporate probation period, during which an independent company compliance monitor will review and report on ZTE`s export compliance program. ZTE is also required to fully cooperate with the Department of Justice (DOJ) in criminal investigations conducted by U.S. law enforcement agencies. The agreement concludes a five-year joint investigation into ZTE`s export practices conducted by the National Security Division of the U.S. Department of Justice.
The Office of the Attorney for the Northern District of Texas, the FBI, the BIS and the Department of Homeland Security, the Homeland Security Investigations of the U.S. Immigration and Customs Enforcement. On the 11th. In June, the U.S. Department of Commerce`s Bureau of Industry and Security (“BIS”) issued an alternative settlement agreement with ZTE Corporation and ZTE Kangxun Telecommunications Ltd. (“ZTE”) and an accompanying replacement order. The deal replaces a March 2017 agreement between the BIS and ZTE that settled allegations that ZTE violated U.S. export controls and economic sanctions against North Korea and Iran. The new agreement repeals a seven-year refusal order that the BIS imposed on ZTE on April 15, 2018 for violating the March 2017 agreement with the BIS by making false statements to the agency. Thursday, June 7, 2018, United States Secretary of Commerce Wilbur Ross announced that the government has entered into a “definitive agreement” with Chinese telecommunications and information technology company Zhongxing Telecommunications Equipment Corporation of Shenzhen, China (“ZTE Corporation”) to amend and replace the current U.S.
Department of Commerce (DOC) rejection order. The current rejection order issued by DOC`s Bureau of Industry and Security (BIS) on April 15, 2018 (the “April 15 Refusal Order”) against ZTE Corporation and ZTE Kangxun Telecommunications Ltd. (“ZTE Kangxun”) (collectively, “ZTE”) largely excluded ZTE from the U.S. supply chain for a period of seven years because ZTE failed to comply with agreed terms related to ZTE`s previous illegal sales to Iran and North Korea. had. Under the terms of the new settlement agreement, ZTE must pay a $1 billion fine and deposit an additional $400 million in suspended deposit account before ZTE is removed from the list of rejected persons. The $1.4 billion fine is in addition to the $892 million ZTE paid under the 2017 settlement agreement, resulting in a total penalty of $2.29 billion. ZTE will also need to replace its entire board and management team, and retain a team of dedicated compliance coordinators selected by the BIS for ten years.
The agreement includes a new ten-year suspended rejection order that can activate the BIS if ZTE commits further violations during the ten-year probationary period. On the 23rd. In March 2017, ZTE entered into a settlement agreement with the U.S. government to resolve civil and criminal allegations that ZTE violated U.S. sanctions and export control laws by illegally shipping products from the U.S. to Iran and North Korea. Under the agreement, ZTE agreed to pay a combined fine of up to $1.19 billion and agreed not to commit further violations while revoking its export privileges for a period of seven years.  The settlement agreement also subjected ZTE to mandatory periodic reporting […].