Dear Valued Business Partner:
At ZTE, we understand that export compliance benefits both our company and our business partners. This update describes some of our efforts in Q3 2020 to ensure export control compliance and to maintain strong relationships with our business partners.
●Export Control Law and Policy Tracking: In order to ensure compliance with the latest export control legal requirements, ZTE has established an effective export control law and policy tracking mechanism. During the quarter, ZTE keeps tracking the export control policy changes released by the US government, including the update of the Entity List, revision on the Foreign-Produced Direct Product Rule, and revocation of Hong Kong Special Status. According to the established mechanism, the Export Control Compliance（“ECC”） team shall respond immediately, and cooperate with external consultants to make professional analysis of the rule changes and assess the impact on the company's business. Meanwhile, according to the analysis results, ECC team works with business units to respond actively, including partner screening and supply chain stability assessment, so as to ensure the company's business stability and compliance and safeguard the common interests of the ZTE and our partners.
●Risk Assessment: As the focus of ZTE’s 2020 export control compliance work plan, ZTE continues to pay attention to the risk assessment. For the business areas of ZTE Corporation, ZTE selects a pilot unit and collects relevant information in accordance with its project operation characteristics of the unit. Sort the risks according to project information, and give high priority to interview, inspection, and other assessment activities for projects with high risk levels. In terms of risk assessment of subsidiaries, ZTE shall promote the assessment and inspection of selected high-priority subsidiaries. At present, the risk assessment work in each area is carried out in an orderly manner, which will help ZTE effectively identify and control Export Control Compliance risks and ensure the compliance of ZTE's business.
●Continued Progress of the SAP-GTS System Implementation Project: In Q3 of 2020, ZTE continued to enhance the screening capabilities of Global Trade Services (“GTS”), a more comprehensive product screening solution has been developed to adapt to different product sales models, improve the accuracy of screening results, and effectively reduce compliance risks. Through these measures, the company's automatic compliance control has been enhanced.
●Continued Progress the ECCN Project: The ECCN classification management team keeps on following up the issues found in the interviews with the subsidiaries in the second quarter, and updating the ECCN training materials. Providing customized training according to the different business features of the subsidiaries, and strengthens the understanding of the requirements for the ECCN management and the operation specifications. Through the docking of the ECCN system and the subsidiaries' service systems,setting the control points of key business processes, the basic data can be managed effectively and to ensure that ZTE's export control classification work is effectively promoted.
●Export compliance manual update: According to the update plan of ZTE's Export Control Compliance manual, ZTE divides the original Export Control Compliance manual into the Corporate-level manual, which states the general Export Control Compliance policies and overall requirements. The BU-Level Manuals are detailed description with the introduction of service scenarios based on the Corporate-Level Manual. And cases for complicated or special scenarios are also provided. Following up release of the Corporate-Level Manual in Q2, another 11 BU-Level manuals were released in this quarter. The release helps to improve ZTE's Export Control Compliance system and better guide business practice.
●Cooperation with External Regulators: ZTE has been actively cooperating with the external regulators in monitoring and continuously improving the Export Control Compliance governance system with the assistance of the external regulators. In this quarter, ZTE has continuously and well communicated with regulators about the optimization recommendations raised by them, and implemented the recommendations according to the company's procedures. As part of the Company's efforts to strengthen its Export Compliance Program, ZTE will continue to work closely with the SCC team and the Monitor team to further improve its export control compliance system.
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ZTE thanks our business partners for their continued support. If you have questions, please do not hesitate to contact ZTE by your point of contact.
Chief Export Control Compliance Officer
+65 84999511 (Singapore/新加坡)
+86 18588454350 (China/中国)