ZTE is close to reaching an agreement to end foreign bribery allegations against it, by paying the US government $1 billion, according to a new report from Reuters.
The US Department of Justice continues to investigate the company’s violations of the Foreign Corrupt Practices Act (FCPA) in several regions around the world, while US officials are currently working on formulating a settlement that includes this large amount.
ZTE faces several charges related to paying bribes to government officials in various regions in order to win telecommunications contracts. Sources familiar with the progress of the investigation indicate that the most recent alleged violations date back to 2018, and include suspicious communications deals in South America, especially in Venezuela.
The company issued a statement to the Hong Kong Stock Exchange confirming continued communication with the US Department of Justice. However, the completion of any agreement with the US side first requires the approval of the Chinese government, given that the country owns a stake in ZTE.
As a reminder, the company has witnessed a series of restrictions and penalties over the past years. In 2017, ZTE officially admitted violating US export laws by sending US technology to Iran and North Korea, resulting in a $1.2 billion fine. In 2018, the US Department of Commerce banned domestic companies from supplying components and software to ZTE for seven years.
Then, in 2020, the US Federal Communications Commission (FCC) classified the company as a national security threat, further restricting its access to US networks, as well as preventing companies using ZTE equipment from receiving government support. In 2022, the Commission banned all imports of ZTE and Huawei equipment, a move that several European countries later followed.
