ZTE Faces $1 Billion US Bribery Penalty

ZTE could pay more than $1 billion to settle a foreign bribery case. The US Justice Department is investigating allegations of corruption in South America and other regions.

The Justice Department is investigating the Hong Kong-listed company for violating the Foreign Corrupt Practices Act, with the most recent case occurring in 2018. The Chinese vendor worked out deals in South America that the Justice Department suspects involved bribery. The Department of Commerce is also reviewing the same facts as the Justice Department to determine if ZTE violated a ten-year agreement reached in 2018 to settle a case related to breaches of US government trade embargoes covering Iran, the news agency stated.

In a stock market filing, ZTE said it is communicating with the US Department of Justice and will resolutely defend its rights and interests through legal means and other measures. It added that the company opposes all forms of corruption and maintains a zero-tolerance policy toward any individuals who may be involved in such activities. Failure to settle with the US government could lead to key US suppliers being barred from exporting to ZTE.

In 2018, the company was forced to suspend global operations shortly after a US government order in April banned domestic companies from selling equipment to the vendor. The company later complied with all requirements of a settlement to resume operations after agreeing to overhaul its board and management, and had paid a $1.4 billion penalty. A year earlier, it pleaded guilty and paid $892 million to settle the case.