The record fine imposed in this case was in part due to the nature of the underlying facts. As noted above, ZTE`s violations were found to be the result of a deliberate system designed by public servants at the highest levels of the company. The U.S. government also found that ZTE deliberately misled investigators for years and renewed its illegal transactions, even after the start of an initial investigation. The sanction clearly reflected the fact that U.S. regulators and prosecutors will be particularly harsh when information is available on deliberate and evasive behaviour, particularly where such elements involve obstruction of justice (i.e., evasive conduct directed at U.S. government investigators). Importance of collaboration with consultants and external accounting firms According to the U.S. Department of Commerce (DOC) press release, ZTE has set up external consultants and a mediated accounting company that unknowingly participated in the company`s system.
ZTE allegedly deleted and concealed documents and other information in order for its consultants and external audit firms to mislead U.S. government investigators. This serves as a warning to those who recruit consultants and auditors to investigate possible violations, but who do not cooperate with an internal investigation. ConclusionThe implantations of ZTE mark the end of a long and revolutionary investigation. The case is noteworthy because of the underlying factual findings, the manner in which the DOC used the entity list designation and the temporary licence to support a resolution to the investigation and assessment of record fines. Comparisons highlight the importance of a robust compliance program that reaches the highest levels of corporate structure. They also serve as a warning to avoid evasive behaviour in dealing with lawyers and federal supervisors, as well as consultants and advisers responsible for illegal acts. “ZTE Corporation has not only violated export-related export controls, which remove sensitive U.S. technology from the hands of hostile regimes like Iran – they have lied to federal investigators and even misled their own advisers and internal investigators about their illegal actions.” “This plea agreement calls them to account and makes it clear that our government will use all the tools at our disposal to punish companies that violate our laws, obstruct justice and endanger our national security. I thank the National Security Division of the Department of Justice, the U.S. Attorney`s Office for The North Texas Neighborhood and the FBI for their excellent work on this investigation.
The government`s decision to rescind ZTE`s opt-out in exchange for the new conciliation agreement has drawn strong criticism from Congress, which has already introduced several changes to ZTE`s pending legislation in recent weeks. For example, Senator Chris Van Hollen (D-MD) recently tabled an amendment that was introduced in the Senate National Defense Authorization Act (NDAA) bill, which would prohibit President Trump from changing the sentences imposed on ZTE unless he certifies to Congress that ZTE has fully complied with U.S. law for a one-year period. And shortly after the Commerce Department announced the new settlement agreement, Senators Tom Cotton (R-AR), Van Hollen and Chuck Schumer (D-NY) made a bipartisan change to the NDAA, which would restore sanctions against ZTE as soon as the NDAA entered into law and require the president to make certain certifications before the sanctions were repealed. Senator Mark R. Warner (D-VA), vice chairman of the Senate Intelligence Committee and a member of the Senate Banking and Finance Committee, also issued a statement outlining the broader national security concerns of the U.S. government regarding ZTE.