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September 2018 Export Compliance Letter to Business Partners

Dear Valued Business Partner:


ZTE has resumed normal business operations.  ZTE appreciates the support of our business partners, and we wish to provide an update regarding our compliance efforts.  


ZTE is actively working to meet its compliance obligations under its agreement with the US Department of Commerce’s Bureau of Industry and Security (“BIS”).  ZTE is committed to ensuring export compliance to avoid any future issues for ZTE or our business partners.  In this letter, we will discuss the following topics:


●BIS lifted the Denial Order, and ZTE signed the Superseding Settlement Agreement


●The National Defense Authorization Act does not affect the Denial Order


●ZTE is actively enhancing its export compliance program


●BIS has appointed a Special Compliance Coordinator (“SCC”)


●ZTE is cooperating with the Monitor and the SCC


BIS Lifted the Denial Order, and ZTE Signed the Superseding Settlement Agreement


On 8 June 2018, BIS terminated the Denial Order against ZTE.  ZTE may now purchase third-party parts, components, systems, technology and services from US suppliers (subject to applicable export control restrictions) and sell telecommunications equipment in the US and global commercial markets. ZTE is actively working to meet all of its customer service requirements. We deeply appreciate the consistent understanding and strong support from you and your company during this challenging period.  


ZTE agreed to a Superseding Settlement Agreement (“SSA”) with the US government. Under the SSA, ZTE’s ability to use US parts and components, as well as its other business operations, remains subject to compliance with applicable US export controls regulations. ZTE has agreed to not conduct business in certain countries subject to US economic sanctions.


The National Defense Authorization Act Does Not Affect the Denial Order


On 13 August 2018, the National Defense Authorization Act (“NDAA”) became law in the United States.  The NDAA does not re-impose the 15 April 2018 Denial Order against ZTE.


However, Section 889 of the NDAA directly and indirectly prohibits the US federal government from procuring certain telecommunications equipment or services from designated Chinese companies, including ZTE, or from other companies that rely upon those designated companies’ equipment or services as a substantial, essential or critical part of any system.   However, there are certain exceptions for network interconnection and end-user equipment.  


ZTE is Actively Enhancing its Export Compliance Program


Export compliance is a top priority for ZTE. Export compliance is the responsibility of all ZTE employees, and ZTE is taking many steps to strengthen its export controls compliance program. Compliance creates value for ZTE and our business partners.


●Our Senior Management is committed to Compliance: The ZTE senior leadership team is dedicated to export compliance. On July 26, 2018, Chairman Li Zixue and President Xu Ziyang issued a statement to all employees to express senior management’s commitment to export controls compliance.  At the same time, they also released our new export controls policy and mandated that all employees use a new form to certify their compliance with all applicable export controls.  


●Increased Resources for Export Controls Compliance: ZTE has dedicated substantial external and internal resources for export controls compliance. The expanded export controls department includes a Chief Export Compliance Officer and Regional ECC Directors (in China, Europe, the Americas, and the Middle East)  and other directors, managers, supervisors and support personnel in China and internationally.  ZTE intends to significantly increase these resources to ensure compliance and to meet its settlement obligations.


●Publishing Export Control Classification Information. ZTE and its subsidiaries will publish the Export Control Classification Numbers (“ECCNs”) for all ZTE items subject to US export controls.  This list of ECCNs will be published in Chinese and English on company websites and will be shared in written or electronic form with customers.


●Updated Export Compliance Manual. ZTE distributed an updated and enhanced export compliance manual. The new manual details our export compliance policies and procedures for all ZTE and subsidiary employees.  ZTE will continue to expand and update this Manual.


●Export Compliance Procedures at ZTE Subsidiaries. ZTE‘s compliance team and expert consultants are visiting, reviewing and enhancing export controls procedures at its subsidiaries in China and globally.


●Open Letter to Business Partners. ZTE posted online an updated letter to business partners and employees. ZTE looks forward to continuing our compliance dialogue with our partners.  


BIS Has Appointed a Special Compliance Coordinator and ZTE is Cooperating with the Monitor and the SCC

BIS已经指定了一名特别合规协调员, 中兴公司正在与监察官和特别合规协调员进行配合

ZTE continues to cooperate with the Monitor, James M. Stanton. On August 24, 2018, US Secretary of Commerce appointed Roscoe C. Howard, Jr., as the SCC (Special Compliance Coordinator). Mr. Howard is a partner in the Washington, D.C., office of the Barnes & Thornburg law firm.

中兴公司继续与监察官James M. Stanton进行配合。2018年8月24日,美国商务部长指定Roscoe C. Howard, Jr.担任特别合规协调员。Howard先生是Barnes & Thornburg律师事务所哥伦比亚特区华盛顿办公室的合伙人。

ZTE appreciates its collaborations with our business partners on compliance and on innovations in the telecommunications industry. If you have questions, please do not hesitate to contact ZTE by email at complianceaudit@zte.com.cn or by telephone on 400-830-8330 (in China) or +86 755 26771706 (outside China).

中兴公司重视与业务合作伙伴在合规和电信行业创新方面进行的合作。如您有任何问题,请随时与中兴公司联系。您可以发送电子邮件至complianceaudit@zte.com.cn或拨打400-830-8330(中国境内)或+86 755 26771706(中国境外)。

Lawrence Koh

Chief Export Control Compliance Officer



ZTE Corporation
+65 84999511 (Singapore)
+86 18588454350 (China)

CECO Newsletter to Business Partners