US appoints compliance team to ZTE for 10 years

Washington on Friday designated a special compliance team led by a former US attorney to police China’s ZTE Corp on a real-time basis with “unprecedented access” to the company’s information, which Chinese observers said on Monday would largely have a positive impact on the Chinese firm’s operation in the US despite potential risks of trade secret leakage.

The US Commerce Department made the announcement on its website Friday of the selection of Roscoe C. Howard Jr. to be the Special Compliance Coordinator for China’s ZTE as result of the previous settlement between the department and ZTE that included a $1.76 billion fine, a 10-year probationary period and the installation of a coordinator to regulate and supervise a team answerable to the department’s Bureau of Industry and Security.

The “unprecedented access” mentioned in the announcement meant access to literally all company information, a ZTE public relations representative told the Global Times Monday on condition of anonymity.

The coordinator will coordinate, monitor, assess and report on compliance with US export control laws by ZTE, its subsidiaries and affiliates worldwide, the representative said.

“Unprecedented access” is designed to enable the compliance team to improve the speed with which the Department of Commerce can detect and deal with violations, said another department statement in July.

ZTE must retain the team for 10 years, according to a statement published on the website of the US Department of Commerce in June.

The coordinator and his team, according to their job descriptions, will help ZTE better understand US laws and regulations and avoid violating them again, which is “largely positive for the company in the long run,” Xiang Ligang, chief executive of telecom industry news site cctime.com, told the Global Times.

Xiang said the compliance team was unlikely to carry out espionage “as it is part of the agreement reached by the two sides, but it cannot exclude such a possibility.”

The positive impact outweighed the risks, Xiang said.