Timeline: How did China’s largest listed 5G phone equipment maker land itself in hot water?
The US Department of Commerce slapped a seven-year exports ban on ZTE, denying China’s largest listed 5G telecommunications gear maker access to much-needed components and software, for breaching the terms of a sanctions violation with the US government.
Here’s a timeline of what happened:
14 July 2012: The US Federal Bureau of Investigations found that ZTE had sold banned technology to Iran, and tried to cover up its transaction to block a US Department of Commerce investigation into its violation of trade sanctions.
7 March 2016: Trading of ZTE’s shares halted in Hong Kong and Shenzhen after Reuters reported that the US Department of Commerce was about to slap export restrictions on the company for violating Iran sanctions.
8 March 2016: ZTE said it would cooperate with Washington to resolve US export restrictions.
5 April 2016: ZTE appointed Zhao Xianming to replace Shi Lirong as president and chairman of its board, part of a settlement with the US government for violating Iran trade sanctions. ZTE shares would resume trading on April 7.
28 June 2016: ZTE given a second reprieve from US export restrictions while it sorts out its management to comply with agreement to settle sanction breaches.
15 November 2016: ZTE appointed Matthew Bell, a former consultant of EY and KPMG, to a newly created position of Chief Export Compliance Officer.
18 November 2016: ZTE given a third reprieve from US export restrictions while it prepares to comply with agreement to settle sanction breaches.
22 February 2017: ZTE appointed nine new members to its 14-member board of directors.
24 February 2017: ZTE given a fifth reprieve from US export restrictions.
8 March 2017: ZTE agreed to pay the US government US$1.2 billion in fines, the largest financial penalty ever levied on an export control case. The company also agreed to activate audit and compliance requirements designed to prevent and detect future violations, in exchange for suspending a seven-year denial of export privileges, which could be reactivated if any aspect of the deal was not met.
14 March 2017: ZTE appointed Yin Yimin as new chairman to replace Zhao.
17 April 2017: ZTE reported solid first-quarter results, bolstering its return to growth and seemingly putting its US sanctions behind it.
12 January 2018: ZTE unveiled plans to launch a smartphone with faster 5G internet capabilities at the end of 2018 or early 2019, said Cheng Lixin, chief executive officer of its US division.
16 April 2018: The US Department of Commerce activated its seven-year exports ban on ZTE, denying the Chinese company access to vital components and services for its smartphones and telecommunications gear.