A Letter from the Chief Export Compliance Office to Our Partners – Q4 2023

Dear Business Partner,

ZTE believes that export compliance is of critical importance to sustainable business development, for us and for you as well. This newsletter describes the major efforts we have made in the fourth quarter of 2023 to ensure export control compliance. We believe these efforts will help manage export control compliance risks and promote the sound development of our business relationship.

On October 17, 2023, the Bureau of Industry and Security (BIS) under the U.S. Department of Commerce updated the export control rules on advanced computing semiconductors. The new rules have imposed severer restrictions with wider impact. After the new rules were released, ZTE immediately conducted interpretation as well as analysis and inspection of possible impacts on the business. Specifically, we have identified and confirmed the purchased parts that may fall within the scope of the new rules, and analyzed and classified the self-developed products that may be affected. Accordingly, the company issued compliance guidelines related to the new rules, specified the applicable export authorizations, and provided solutions for incorporating relevant compliance controls into business IT systems, thereby ensuring efficient, stable, and compliant business operations.

Also, the company continued to strengthen exchanges with partners to enhance our compliance credibility. In Q4 2023, my team and I visited customers in Myanmar, the Philippines, Singapore, Vietnam, Hong Kong SAR, Dubai, Qatar, and Egypt, exchanging ideas and experience in compliance practices. Meanwhile, over 30 partner companies were invited to ZTE, to know about our digital tools for compliance management and discuss the future trend of digital compliance management. Through these activities, we hope to enhance the mutual understanding with our partners and further increased the influence of our compliance brand.

It is also worth sharing that, with ZTE's continuous efforts, breakthroughs in the face-to-face communication with the U.S. government agency have been achieved. In October and November 2023 respectively, I met with BIS officials twice in Washington. During the meetings, we exchanged views on the monitorship as well as the interpretation and application of export control rules. ZTE looks forward to establishing a long-term communication mechanism with BIS to actively share the company's progress in compliance system building.

On November 16, 2023, the Export Control Compliance Session of ZTE's 4th Multinational Corporation Trade Compliance Symposium was successfully held in Shenzhen. This session gathered government officials, business professionals, and pioneers in corporate compliance for exploration into such topics as changes in export control rules inside and outside China, digital compliance management, and high-quality compliance system building. The insights of the speakers and heated discussions during the session have brought inspiration to attendees on how to maintain steady operations while making progress under such a volatile environment.

In 2024, ZTE will continue to optimize its export control compliance management system and further promote digitalization in this regard for effective and efficient compliance risk control, thus safeguarding the steady business operations of both of us.

Lawrence koh 许绍勤 Chief Export Compliance Officer 首席出口管制合规官 ZTE Corporation 中兴通讯股份有限公司 Lawrence.koh@zte.com.cn +65 84999511 (Singapore/新加坡) +86 15768250208 (China/中国)