Home > News content

Comprehensive blockade: US 14-page announcement details the release of the ban on ZTE exports

via:澎湃新闻     time:2018/4/18 8:02:45     readed:218

Original title: Fully blocked! U.S. Department of Commerce issued a 14-page announcement detailing the ban on export of ZTE

News reporter Cheng Tianmeng

The U.S. Department of Commerce stated that ZTE violated some of the terms of its settlement agreement with the U.S. Department of Commerce in March 2017: ZTE’s two letters to the U.S. government in November 2016 and July 2017 stated that the company’s The 39 employees who had previously been found guilty of the violation were punished. However, when the Department of Industry and Security of the US Department of Commerce requested it to provide a specific report in February 2018, it failed to produce evidence. ZTE subsequently admitted that it did not reduce bonuses or impose sanctions on corresponding employees as stated in the letter.

However, ZTE did not make any public comment on this development. It merely stated that it had learned of the US Department of Commerce’s refusal to activate the company. The company is fully evaluating the possible impact of this incident on the company and actively communicates and responds to all aspects.

The following is a summary of the ban on the ban issued by the U.S. Department of Commerce against ZTE’s 14-page export ban, which includes the process of the ban and specific terms.

ZTE's settlement agreement with the U.S. Department of Commerce

In March 2017, the U.S. Department of Commerce’s Bureau of Industry and Security and ZTE reached a settlement agreement. ZTE sold communications equipment to Iran and North Korea in violation of the corresponding provisions of the US Export Administration Regulations. In the settlement agreement, it agreed to merge with the US Department of Commerce for civil and criminal fines totaling US$1.19 billion. ZTE also admitted that it has participated in a plan to conceal the unlicensed transaction from the U.S. government.

In the settlement agreement, the U.S. Department of Commerce’s Bureau of Industry and Security imposed a civil fine of 661 million U.S. dollars, of which 300 million U.S. dollars were temporarily not paid in accordance with the probationary period of 7 years from the date of entry into force of the agreement. The pending fines are related to some pending terms in the settlement agreement. In addition to requiring ZTE to no longer violate the US Export Administration Act or U.S. export management regulations, ZTE has also agreed to settle under a similar condition. The 7-year export rights refused to order.

If ZTE violates the settlement agreement with the U.S. Department of Commerce and fails to comply with the terms and conditions of the stay, a pending fine of 300 million U.S. dollars may immediately expire in full and the 7-year refusal order for export rights will be effective.

The U.S. Department of Commerce issued a ban on ZTE to prohibit US companies from selling restricted goods to ZTE. The reason is that ZTE violated the 2017 settlement agreement.

So, which settlement agreement did ZTE violate?

The pending effectiveness of customization and ZTE's response

In February 2018, the U.S. Department of Commerce’s Bureau of Industry and Security requested ZTE to provide periodic reports that included the positions of all employees mentioned in the two letters ZTE submitted to the U.S. government through external consultants. Bonus information.

In two letters submitted by the company to the U.S. government in November 2016 and July 2017, ZTE stated that the company had or was about to impose sanctions on the 39 employees that had previously been found to have violated the rules. However, according to the US investigation, ZTE now admits that ZTE did not issue a letter of disposition to employees after being required to report for one month. Besides all employees, all relevant employees received 2016 bonuses.

On March 13, 2018, the US Department of Commerce’s Bureau of Industry and Security sent a letter to ZTE that ZTE’s pending custom ruling would be effective because it violated the pending clause in the settlement agreement. The letter gave ZTE a chance to respond. ZTE responded on March 16, 2018.

Richard R. Majauskas, Executive Secretary of the U.S. Department of Commerce, evaluated ZTE's response. In addition, according to ZTE’s response to the U.S. government during the U.S. Department of Commerce’s multi-year survey, he believed that ZTE had made a fraudulent move and made false statements. Repeat violations of U.S. law. In the end, Majauskas signed a document to implement the ban on ZTE.

According to a Reuters report on April 16, senior officials of the U.S. Department of Commerce told Reuters that as part of the settlement, ZTE agreed to dismiss its four senior employees and reduce bonuses or penalties for 35 other employees, but in fact, ZTE admitted in March 2018 that it had dismissed 4 senior employees but did not reduce the bonus or punishment for 35 other employees.

The above report also mentioned that in the ZTE official letter, it admitted that it had “not fully implemented” some disciplinary measures, and there was an “inaccuracy” in the 2017 letter. The order also mentions that ZTE stated that "in light of the seriousness of the custom-made sanctions, it is irrational to deliberately mislead the U.S. government."

7 Years of Export Refusal to Order Specific Terms

Based on the overall situation, Majauskas made the decision to fully implement the pending refusal order. In the seven years up to March 13, 2025, U.S. companies were suspended from exporting to ZTE. U.S. companies can't export ZTE's prohibited products, including chips, directly or through other countries. Orders take effect immediately.

澎湃 News reporters reviewed the ban clauses issued by the official website of the US Department of Commerce and found that in addition to the restrictions on trading for ZTE Corporation, they also included restrictions on those involved in the transaction. The specific ban includes the following aspects:

1. From the date of issuing the order until March 13, 2025, ZTE Corporation, including its successors, divisions, directors, executives, employees, representatives, and agents (hereinafter collectively referred to as "rejected persons") cannot directly or indirectly Any form of participation in the export of any commodity, software, and technology product (hereinafter collectively referred to as the "Project") subject to the US Export Administration Regulations (hereinafter referred to as the "Regulations"). These restrictions include:

1. Apply for, obtain or use any license, exempt license, or export control documents.

2, through the booking, purchase, acceptance, use, sale, delivery, storage, transportation, delivery, financing or any other way to be subject to "Regulations" restrictions on export goods trading or other activities.

3, in any way to benefit from the "Regulations" limited export goods trading or other activities.

Second, no one can directly or indirectly engage in the following activities:

1, on behalf of "rejected" exports or re-export any "regulations" restrictions "project."

2. Take any action to help the "rejected person" to purchase any "regulations" to restrict the ownership, ownership or control of the "project", including financing or other supporting transactions.

3. Take any action to purchase "Regulations" that have been exported from the United States from "Rejected Persons".

4. Know that these goods will be exported from the United States and also from the "rejected" office in the United States to obtain any "regulation" restrictions "projects."

5, Participate in any "Regulations" controlled by "Rejected" to restrict "Project" trading services. Services include installation, maintenance, repair, modification or testing.

The U.S. Department of Commerce’s export ban also mentioned that, following the U.S. Export Administration Regulations, after giving notice and having the opportunity to solicit opinions, any person, company, or business organization involved in the transaction or related services with the “rejected” should also Obey the rules of this order.

The Financial Times believes that this move will prohibit any US company from doing business with ZTE anywhere in the world. "This actually excludes them from activities involving the United States and any American items, whether pencils or routers," said a former U.S. official familiar with the case.

China IT News APP

Download China IT News APP

Please rate this news

The average score will be displayed after you score.

Post comment

Do not see clearly? Click for a new code.

User comments