ZTE is reportedly closing in on a deal to resolve its foreign bribery allegations by way of a $1 billion payment to the U.S. government. According to a new Reuters News report, the U.S. Department of Justice has an ongoing investigation into ZTE’s violation of the Foreign Corrupt Practices Act (FCPA) across several regions, with U.S. officials now working on a resolution that would involve a $1 billion payment.
ZTE faces multiple bribery allegations under the FCPA for allegedly bribing officials across several regions to secure telecom contracts. According to people familiar with the ongoing DOJ investigation into ZTE, the most recent bribery allegations date back to 2018 and involved questionable telecom deals in South America and, more specifically, Venezuela.
ZTE issued an official statement to the Hong Kong Stock Exchange, which confirmed the reports of ongoing communication with the U.S. DOJ. If a deal is to be reached with the U.S. government, it would first need to pass approval from the Chinese government, as ZTE is partially state-owned.
If you need a refresher, here’s a brief timeline of the ZTE restrictions and bans.
In 2017, ZTE pleaded guilty to illegally exporting U.S. technology to Iran and North Korea, which resulted in a $1.2 billion fine. A year later, the U.S. Department of Commerce banned U.S. companies from exporting components like chips and software to ZTE for a period of 7 years.
In 2020, the U.S. Federal Communications Commission (FCC) designated ZTE as a national security threat and further restricted its access to U.S. networks while also blocking federal subsidies to carriers using ZTE network equipment. In 2022, the FCC banned all imports of ZTE and Huawei networking equipment, which was also followed by multiple European Union member states.
