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 Q4 2020 to ensure export control compliance and to maintain strong relationships with our business partners.
Continue to drive the building of the operational subsidiaries compliance system: To further support the construction of the operational subsidiaries' independent compliance system and impart the compliance practice experience to the tier-1 operational subsidiaries, the Operational Subsidiaries Compliance Enhancement Program (OSCEP) in-house consultancy team hosted the second compliance symposium of operational subsidiaries from December 4 to 5. The General Managers, Chief Compliance Officers, Export Compliance Point of Contacts (ECPOC) and compliance managers of the tier-1 operational subsidiaries attended the symposium. The theme of this symposium is "Risk-oriented, Deepening compliance system building." Focusing on compliance empowerment, this symposium focuses on the supervision mechanism of the in-house consultancy team, ECP elements, pilot and planning of the subsidiary compliance manual and anti-commercial bribery compliance. It also shared contents such as EAR policy update interpretation and cutting-edge developments of external law offices. At the same time, the symposium set up a speech-speaking session on common compliance questions. The OSCEP consultancy team held a centralized discussion and answered questions. By disseminating the compliance concept and practice experience through the compliance symposium platform, the company has expanded its strategic landscape, and played an important role in continuously improving the compliance operation level of operational subsidiaries and improving the compliance system.
Release of the first domestic Export Compliance Scan System (ECSS): The ECCN project team adheres to the idea of "compliance creates value," and uses the product-based thinking to lead the design of the first domestic Export Compliance Scan System (ECSS). The first official version was released on November 28. ECSS has leading advantages in terms of architecture design, deployment mode, multiple legal entities support of group company, and adaptation of global export control laws and regulations. It enables the scanning process and results to be visible and traceable. The launch of ECSS reflects ZTE's commitment to complying with all applicable export control laws and regulations and to building a world-class Export Control Compliance system. In 2021, ECSS will be deployed in ZTE's operational subsidiaries to assist the subsidiaries in the systematic management and control of Export Control Compliance.
Proactive Outreach with external parties on compliance research and compliance system construction experience sharing：In this quarter, a number of domestic organizations contacted ZTE to discuss the experience in export control and ZTE compliance system construction. ZTE proactively shared experience in compliance research and compliance system construction with domestic and foreign business partners and government organizations, including seven domestic communications on export control and three communications with key overseas customers. At present, the 2nd Multinational Enterprise Trade Compliance Forum on “Building a Compliance Business Environment” hosted by ZTE is under preparation. By strengthening communications and cooperation with academia, the legal profession, and the business community, ZTE has demonstrated its excellent compliance corporate image and continuously improved its compliance brand recognition.
The compliance effort of the Company was recognized by the Monitorship：In the fourth quarter of 2020, customers of ZTE communicated with the Special Compliance Coordinator (SCC) team. During the communication, the SCC team recognized the efforts and commitment made by ZTE to strengthen compliance work, and considered ZTE to have good performance in terms of supervision cooperation and Superseding Settlement Agreement execution. On the other hand, the customer also recognized the importance ZTE attached to compliance, and the transparency, seriousness, and efforts of ZTE made good impression on the customer.
Review of key ECP construction in 2020: In this year, ZTE selected the R&D field to conduct risk assessment in the business field of ZTE Corporation, with risk-oriented, to collect relevant information and determine priorities and to conducting interviews, checks and other assessment activities for the projects with high risk priority. In terms of recordkeeping, ZTE has completed the implementation of six recordkeeping requirements embedded into the process work and revised the response specifications. The compliance manual project team held a press conference on official release of the new Export Control Compliance Manual. We will continue to push the pilot of the subsidiary’s compliance manual. In terms of training, we have completed the review of the pilot training of the engineering service, and started the training of the project management positions of the outsourced personnel and outsourcers of the engineering service. In terms of system control, the ECCN risk early warning tool has been put into operation, and the export compliance scan system ECSS has been launched. The GTS system of the subsidiary has completed the compliance end-to-end test, output the report, completed the Information Technology General Control (ITGC) audit of the subsidiary and output the report. These actions would help ZTE effectively identify and control Export Control Compliance risks, improve Export Control Compliance governance, and strive to build a world-class 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)