ZTE HAS NO STATIC
Chinese phone outfit suddenly eligible to do US biz
What a difference two months — and some Oval Office prodding — make.
Commerce Secretary Wilbur Ross on Thursday said ZTE, the Chinese smartphone maker, was back in the good graces of Uncle Sam — after it agreed to fork over a $1 billion fine and allow US regulatory cops to walk a beat inside the company’s headquarters.
ZTEmust also change some management and its board — and place $400 million on deposit in Washington in case it violates US sanctions in the future, the Commerce Department said.
The agreement — which will basically bring ZTE back from the dead — is quite a turnaround from the actions taken and words spoken on April 16, when Ross, citing the telecom’s violation of USsanctions against selling goods to Iran, banned the Beijing company from buying parts from American suppliers.
That denial of export privileges by Uncle Sam was ZTE’s death warrant. Thursday’s action gives the Chinese company a stay of execution.
“ZTE misled the Department of Commerce,” Ross said in a statement when the ban was put in place. “Instead of reprimanding ZTEstaff and senior management, ZTE rewarded them. This egregious behavior cannot be ignored.”
Shortly after the harsh words from Ross, President Trump, feeling heat from Beijing, ordered his Commerce Department to seek out ways to let ZTE stay in business.
Thursday’s action was the result of the Trump order.
The reversal did not sit well with lawmakers on Capitol Hill.
“Congress should move in a bipartisan fashion to block this deal right away,” Senate Minority Leader Chuck Schumer said in a statement.
Sen. Marco Rubio (R-Fla.) took to Twitter to decry the deal, which he said would do “nothing to keep us safe from corporate & national security espionage.”
“I assure you with 100 percent confidence that ZTE is a much greater national security threat than steel from Argentina or Europe,” the ju- nior senator added.
Sen. Mark Warner (D-Va.), the ranking member of the Senate Select Committee on Intelligence, said in a tweet, “This idea of ‘embedding a compliance team’ at ZTE is a nice talking point, but unless the Trump Administration plans to open an FBI counterintel field office inside the company, Beijing is about to get one heck of a deal on a back door into US telecom networks .”
Back in February, the directors of a number of US intelligence agencies, including the CIA and FBI, testified before the Senate Intelligence Committee to recommend that Americans not use products from Z TE for fear that it would provide China with“the capacity to conduct undetected espionage .”
“We’re deeply concerned about the risks of allowing any company or entity that is beholden to foreign governments that don’t share our values to gain positions of power inside our telecommunications networks ,” FBI Director Chris Wray said at the time.
The initial US supplier ban was imposed after ZTE failed to comply with an agreement with the Commerce Department in 2017, when it pleaded guilty in federal court in Texas to conspiring to evade USembargoes by illegally shipping US goods and technology to Iran.