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Anti-Bribery Compliance Requirements of Code of Conduct

Conducting Business without Bribery and Corruption

Our success here at ZTE is obtained fairly and with integrity. Bribery and Corruption damages the trust our customers, business partners and communities have in us, our industry and the wider economy. As such, we have zero tolerance towards any form of bribery and corruption. 

We have the obligation to be fully compliant with all anti-bribery laws, regulations and conventions that prohibit bribery and corrupt actions in obtaining or retaining business, or obtaining any other improper advantages, around the world that are applicable to ZTE’s business. These laws and regulations include but are not limited to the relevant laws of China, U.S. Foreign Corrupt Practices Act (“FCPA”) and U.K. Bribery Act (“UKBA”). Even in jurisdictions where such laws may not exist, ZTE prohibits its employees and its third party representatives to engage in bribery and corruption on behalf of ZTE. 

ZTE has issued and implemented global anti-corruption policies and compliance procedures applicable to management, employees, subsidiaries and affiliates of ZTE Corporation. The global policy is called the Anti-corruption and Anti-bribery Anti-corruption and Anti-bribery Policy and Compliance Guidance of ZTE Corporation and emphasizes ZTE’s commitment to anti-corruption.

The Anti-corruption and Anti-bribery Policy and Compliance Guidance stipulates corporate principle policies, specific policies and compliance procedures regarding key risk areas, among others, including: facilitation or “grease” payments, gifts, meals and entertainment, company-sponsored travel, political contributions, community engagement, sponsorship and philanthropy, host government support, using third parties, joint ventures, hiring government officials and their relatives as employees, business dealings with government officials, solicitation of bribes and extortion.

According to the Anti-corruption and Anti-bribery Policy and Compliance Guidance, ZTE has issued and implemented 43 local anti-corruption and anti-bribery policies and procedures for subsidiaries in different countries, such as the US, UK, Germany. 

Beyond the policies and procedures, effective implementation of certain anti-corruption and anti-bribery related controls are integrated into ZTE’s business activities and processes through, but not limited to, IT solutions, third party certification, bidding protocol, purchasing processes, sales processes and expense claims. 

Business Dealings with Government Officials 

We strive to win governmental tenders and business opportunities because of the excellence and innovation in our products and services. As such, we never seek to obtain or retain business advantages by unethical means. For every business dealing or commercial interaction with any government official, we should always adhere to the principals of transparency, honesty and integrity.  The Anti-corruption and Anti-bribery Policy and Compliance Guidance provides further guidance on how we manage commercial interactions with government officials.

Questions:

Answers:

I am representing ZTE on the bidding of an important governmental project, and I was told by the bidding agent that the government official who is in charge of the tendering process is under heavy mortgage loans. The bidding agent suggested me to offer some “assistance” to the government official in order to secure the contract. What should I do?

The bidding agent is suggesting to you that you should provide a bribe. Regardless of the amount of money the bidding agent intended to ask for, you should not provide the amount, either in money or anything of value. You must decline to offer anything and report the matter to the Compliance Management Departments as soon as possible.

We have hired a consultant to help with obtaining the necessary licenses which we need for business operations in a new market. The consultant has just asked for an additional large amount of money to “help keep things going forward smoothly”. What should I do?

ZTE can be liable for any improper actions of our third parties, including consultants. It is our obligation to ensure our third parties do not offer bribes or facilitation payments on our behalf. You should not pay the amount unless you can confirm that the payment is legitimate and compliant with the laws. Otherwise, you have to contact the Compliance Management Departments to make a report or approval, and terminate our relationship with the consultant as soon as possible.

My supervisor has instructed me to provide a Rolex watch as a gift to a government official who helped us obtain some troublesome licenses, in order to show our gratitude for her assistance with the application process. Is this acceptable?

No, you are not allowed to provide any lavish gifts to anyone, including government officials. A Rolex watch would never be seen as a modest and appropriate gift to promote goodwill. You should not provide the gift despite the instructions from your supervisor, and you have to make a report to the Compliance Management Departments immediately.

Would the answer to the above scenario change if the watch was a Seiko watch?

No gift shall be offered to any government official in principle, unless it complies with relevant laws and regulations and the compliance regulations of the recipient’s organization, and our company’s prior compliance approval has been obtained.



Offering and Accepting Gifts and Benefits

Bribery does not only come in the form of cash or cash equivalents. A bribe could take the form of anything of value, such as:

  ●Gifts 

  ●Travel or accommodation

  ●Entertainment

  ●Meals

  ●Employment opportunities

  ●Donations

  ●Favors

  ●Sponsorships

  ●Other advantages

Therefore, we must be careful when offering and accepting gifts and benefits, because these are at risk of acting or perceived to be acting as bribes. 

Gifts and benefits must have a clear business purpose, must be nominal signs of respect, friendship or appreciation, reasonable and appropriate in context, and must be explicitly given without the intent or expectation of any special treatment, consideration or value in return. It is strictly prohibited to offer, provide or accept gifts and benefits that can appear or be interpreted as bribes or other improper forms of compensation, payment or inducement in exchange for or to influence improper acts, or as a gratitude after-the-fact. 

Before providing or accepting any gifts or benefits to or from any third parties, please refer to The Anti-corruption and Anti-bribery Policy and Compliance Guidance for detailed information about our gifts policy.

Questions:

Answers:

Shall I offer a pen with the logo of ZTE to our clients when they attended our annual conference?

A gift shall be offered with clear and reasonable business purposes.  When offering a gift to our clients with respect to your role at ZTE we should verify that this activity is allowed according to the local laws and regulations, receiver’s company policies and regulations. 



Avoiding Conflict of interest

Conflict of interest arises from a set of circumstances that may create a risk for ZTE when our personal interests compete or conflict with the interests of the Company. The conflict exists because our personal interests may adversely impact the way we do our jobs or make decisions at ZTE. We must avoid conflict of interest, actual or potential, which may put ZTE’s interests or reputation at stake. Even the perception of a conflict of interests should be avoided and declared, even if no actual conflict exists.

It is important to exercise caution and good judgment before entering into any business relations, investments or activities that can cause us to place our personal interests over those of ZTE. It is not possible to list all of the conflict of interest that may arise in the course of our work at ZTE, though here are some common examples of situations that we should avoid:

  ●Having an employment, contracting or consulting relationship with a ZTE competitor, supplier, customer or other kinds of third parties

  ●Serving on the Board of Directors or Management Committee at a ZTE competitor, supplier, customer or other kinds of third parties

  ●Holding a financial interest in a ZTE competitor, supplier, customer or other related third parties

  ●Hiring, managing, promoting or supervising a relative, romantic partner or close friend at ZTE merely based on connection and close relationship 

  ●Awarding a ZTE business opportunity to a business which belongs to either our relatives, romantic partners or close friends based on our connections

  ●Pursuing or undertaking any opportunities in which ZTE could have an interest that is identified through the use of our information, property or resources

  ●Offering or accepting gifts, entertainment or other benefits inconsistent with ZTE’s Policy to or from our competitors, customers or other third parties 

  ●Using ZTE’s assets, including equipment, telephones, materials or proprietary information for unauthorized personal use or outside work 

  ●Performing non-ZTE work or soliciting non-ZTE business during working hours 

Sometimes we might find ourselves in situations that are not addressed in these examples, yet if it is uncertain whether we should disclose or declare the situation, we should ask ourselves:

  a)Is the decision or action legal and in line with ZTE’s rules and regulations?

  b)Is the decision or action in ZTE’s best interest?

  c)If the decision or action is reported in the media, will it cause harm to ZTE’s reputation? 

If you feel uncomfortable when answering any of these questions, it may indicate that disclosure is necessary. 

3.6.1Disclosing and declaring potential or perceived conflict of interest 

Transparency (that is, making sure the actions are disclosed and visible) is essential to avoiding conflict of interest. We are required to disclose any potential, perceived or actual activity in which our interests may be in conflict with ZTE’s interests. The obligation to disclose conflict of interest continues throughout employment at ZTE. 

Questions:

Answers:

A close friend of mine is the owner of a construction company which is qualified to be our partner on an upcoming ZTE factory construction project. Could I ask my friend to participate in the bidding for ZTE’s business?    

Yes, you may invite your friend to formally participate in the ZTE bidding process. You will be required to disclose your relationship with your friend to management or the Compliance Management Departments. If your friend’s company decides to bid, you must be entirely excluded from the bidding selection process, and you are prohibited from providing any confidential information to your friend which may grant his company an improper advantage in the bidding process.

My brother is a well-qualified and experienced electrical engineer. Can I refer him to an opening position we have in my department?

Yes, you may refer your brother to the job opening. You will be required to declare your relationship with your brother to the Human Resources Department and you will be excluded from participating in the recruitment process. You will also not be able to directly manage or be managed by your brother.

Due to my sales expertise in this industry, I want to open a new company with a business partner which could act as a distributor for ZTE products in Western China. I see potentials for both ZTE and my new company to profit from this arrangement. Can I do this?

No, you are strictly forbidden from having a direct or indirect interest in a distributor or reseller of ZTE.



3.6.2Conflict of interest with Business Partners, Suppliers and Other Third Parties

It is strictly prohibited to accept any money or other improper benefits from any business partners, suppliers and other third parties, or potential third parties of ZTE. We are also prohibited from working for a third party who is currently or potentially a ZTE business partner or supplier as this would be a conflict of interests. 

To those whose position at ZTE involves awarding contracts; influencing the allocation of business; creating specifications that result in the placement of business such as Request for Quotations or Request for Proposals; or participating in contract negotiations, it is essential to take extra care to avoid actions that could create the appearance of favoritism for a particular third party.

While dealing with our business partners, suppliers and other third parties, the prudent course of action is to always refuse to offer or receive any courtesies to or from a third party when we are involved in selecting, reconfirming or being selected for an award or contract. We always strive for impartiality and act in ZTE’s best interests when it comes to maintaining proper relationships with our various third parties.

Questions:

Answers:

I have a side job as a contractor at a company providing consultancy services. This was previously approved by my supervisor and the Human Resources Department. Recently, the company won a tender with ZTE’s competitor. I applied to withdraw myself from the project team. Is there anything else I have to do?

You did the right thing by withdrawing yourself from the project team. Even though you will not be directly involved in the project for ZTE's competitor, there is still a potential conflict of interest. You must declare the situation to your manager or the Human Resources Department or the Compliance Management Departments for further guidance.

The general manager of one of our potential suppliers recently invited me for dinner at a fancy restaurant to discuss a potential business partnership. His company is currently bidding for a ZTE project, and I am part of the selection board. What should I do?

You should not attend the dinner due to your position on the selection board. Even a dinner event can create the appearance of favoritism and should be avoided. You should report this incident to your manager and the Compliance Management Departments.