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Quarterly CECO Newsletter to Business Partners – Q1 2021

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 Q1 2021 to ensure export control compliance and to maintain strong relationships with our business partners.

Promote the deployment of ECSS in the subsidiary: In November 2020, the first domestic export compliance scan system(ECSS)designed by the ECCN project team was officially released. The system can be flexibly deployed, supports multiple legal persons of the group, and provides visual scanning results. At present, ZTE has initiated the ECSS deployment of three subsidiaries, and carried out business research and plan implementation with the participation of the subsidiaries and ZTEC. The implementation of the ECSS can help the subsidiary to standardize the enterprise process, identify export control compliance risks, help the subsidiary to implement systematic management and control of export control compliance, and train the subsidiary's own export control compliance management expert team and ECSS maintenance team. The deployment and application of ECSS will promote the systematization and standardization of export control compliance management of the subsidiary and ensure the long-term operation of the export control compliance system of the subsidiary.
推动ECSS在子公司的部署:2020年11月,ECCN项目团队主导设计的国内首款出口合规扫描系统(Export Compliance Scan System,“ECSS”)正式发布。该系统具有部署方式灵活、支持集团多法人、扫描过程与结果可视等优点。目前,中兴通讯已启动三家子公司的ECSS部署,在子公司与股份公司的共同参与下开展了业务调研与方案实施。通过ECSS系统的实施,可以帮助子公司规范企业流程,识别出口管制合规风险,助力子公司实现出口管制合规的系统化管控,培养子公司自有的出口管制合规管理专家团队与ECSS维护团队。ECSS的部署应用,将会促进子公司出口管制合规管理的系统化和规范化,确保子公司出口管制合规体系的长效运行。

Continue to implement the SAP-GTS (Global Trade Service) system: By the first quarter of 2021, ZTE had developed the party scanning function at the terminal, and fulfilled the mobile scanning requirements, thus improving the timeliness and convenience of compliance scanning. At the same time, the GTS implementation project team has continuously expanded the coverage of GTS scanning control. The scrapping business and the outbound delivery of R&D materials have been successfully connected to the GTS system. The accuracy of GTS scanning is increasing, export control compliance risks in different business scenarios are controlled. The function improvement and continuous optimization of the GTS system will further deepen and promote the process of automation of compliance management and control and strengthening risk management.
持续推进SAP-GTS(Global Trade Service)系统实施:截止2021年一季度,中兴通讯已完成移动端的主体扫描功能开发,移动化扫描需求得到实现,提升了合规扫描的及时性与便捷性。同时,GTS实施项目组不断扩大GTS扫描管控的覆盖范围,报废业务和研发物料外发业务已成功接入GTS系统。GTS扫描的准确性不断提升,管控了不同业务场景下的出口管制合规风险。GTS系统的功能提升与不断优化将进一步深化和推进公司合规管控自动化、风险管理强化的进程。

The export control compliance manual project is being promoted: In order to improve the export control compliance rule system in an all-round way, ZTE has independently developed and released the 2020 edition of the ZTE Global Compliance Manuals for Export Controls and Economic Sanctions - Corporate-Level Manual and a total of 12 BU-Level Manuals. On this basis, the influence of compliance manuals in the rule system will be expanded further in 2021. First, the pilot work on the development of the compliance manuals for the three subsidiaries has been completed, and the methodology and training materials for the compilation and release of the compliance manuals for the subsidiaries have been determined through the pilot work, laying a solid foundation for the development of the compliance manuals for the subsidiaries. Second, the community platform for the practice of compliance manuals has been established to effectively promote the compliance implementation of the Export Compliance Program ("ECP") manual elements, other element project, and the compliance implementation contents of each business field. Finally, we revised the Corporate-Level Manual in accordance with the changes in the rules for Sudan's removal from sanctioned countries/regions.
出口管制合规手册项目不断推进:中兴通讯为了全面完善出口管制合规规则体系,于2020年自主编写并发布了2020年版的《中兴通讯出口管制和经济制裁全球合规手册》总册和12册业务分册。在此基础上,2021年将进一步扩大合规手册在规则体系中的影响力。首先,目前已完成三家子公司的合规手册开发试点工作,并通过试点确定了子公司合规手册编写和发布的方法论和培训材料,为全面引领子公司的合规手册开发打下基础;其次,搭建了合规手册实践社区平台,有效拉通出口合规项目(Export Compliance Program,“ECP”)手册要素项目与其他要素项目及各业务领域的合规实施内容;最后,针对苏丹从受制裁国家/地区移除等规则变化,对合规手册总册相关内容进行了及时修订。

Proactive Outreach with external parties on compliance research and compliance system construction experience sharing:On March 22, ZTE hosted the second multinational corporation trade compliance symposium on the theme of "Foster a Compliant Business Environment Together". This symposium brought together about 30 guests from related industries such as leading industry associations, enterprise compliance officers, think tank researchers, university scholars, lawyers, consultants and experts from standard organizations. It carried out in-depth exchanges and discussions on hot issues such as trade control and customs compliance of multinational enterprises, anti-bribery and anti-money laundering, and data protection, and attracted more than 600 professionals from various industries. Through this forum, ZTE hopes to share compliance operation ideas and experience with people from all walks of life, disseminate the spirit and culture of compliance, and jointly build a compliance business environment to improve the compliance management level in international operations.

Outlook for the construction of key ECPs in 2021: ZTE will continue to invest resources in the export control compliance field. We will carry out IT compliance projects, optimize processes, and plan and support all parties' IT demands for compliance ECP construction in a unified manner. We have collected and reviewed the original requirements of compliance data center risk indicators, and started the analysis and technical selection of compliance knowledge product requirements. In the field of risk assessment, we will, in 2021, combine the previous pilot methodology and practical experience. Comprehensively promote risk assessment in each business field, so as to let each business unit understand its export control compliance risk points, and then invest resources according to the risk level for efficient risk management and response. Set up the Business Partner (BP) compliance management project, sort out and identify the compliance risks in partner operation, and promote the risk-oriented BP compliance management capability. At the same time, the company will continue to strengthen compliance exchanges with external supervisors, and with customers and partners at home and abroad to continue emphasize ZTE compliance corporate image, continuously improve the rule system, and continuously strengthen capability internalization.
2021年重点ECP建设展望:中兴通讯将继续保持对出口管制合规领域的资源投入。开展IT合规项目,优化流程,统一规划、支撑各方对合规ECP建设的IT诉求,目前已完成合规数据中台风险指标原始需求收集评审,启动了合规知识产品需求分析与技术选型;风险评估领域,2021年将结合之前的试点方法论和实践经验,在各业务领域全面推进风险评估工作,让各业务单位了解自身的出口管制合规风险点,进而根据风险等级针对性地投入资源以高效地进行风险管理和应对工作;成立BP(Business Partner)合规管理项目,通过组建项目化的运作团队,聚焦外包商和渠道商,梳理和识别合作伙伴经营中的合规风险,推进以风险为导向的公司BP合规管理能力。同时,公司将继续加强与外部监管、国内外客户及合作伙伴的合规交流,继续强调中兴通讯的合规企业形象,不断完善规则体系并持续加强能力内化。

* * * * *

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.

                                                                                          Lawrence koh

                                                                                          Chief Export Control Compliance Officer 

                                                                                          ZTE Corporation
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