ZTE is reportedly approaching a resolution to its foreign bribery allegations through a $1 billion payment to the U.S. government. According to a recent Reuters News report, the U.S. Department of Justice (DOJ) is investigating ZTE for violations of the Foreign Corrupt Practices Act (FCPA) across multiple regions. U.S. officials are currently negotiating a settlement that would involve this sizable payment.
ZTE faces multiple bribery accusations under the FCPA for allegedly bribing officials in various regions to secure telecommunications contracts. Sources familiar with the DOJ’s ongoing investigation say the most recent allegations date back to 2018 and involve questionable telecom deals in South America, particularly Venezuela.
ZTE has confirmed in an official statement to the Hong Kong Stock Exchange that dialogue with the U.S. DOJ is underway. Any final settlement would require approval from the Chinese government given ZTE’s partial state ownership.
For context, here is a brief timeline of prior ZTE restrictions and bans:
In 2017, ZTE pleaded guilty to illegally exporting U.S. technology to Iran and North Korea, incurring a $1.2 billion fine. The following year, the U.S. Department of Commerce imposed a seven-year ban on U.S. companies exporting critical components such as chips and software to ZTE.
In 2020, the U.S. Federal Communications Commission (FCC) designated ZTE as a national security threat, restricting its access to U.S. networks and blocking federal subsidies for carriers using ZTE equipment. By 2022, the FCC had banned all imports of ZTE and Huawei networking products, a move subsequently echoed by several European Union member states.
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