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ZTE

ZTE

US Commerce Secretary Wilbur Ross taps former prosecutor to serve as legal watchdog over ZTE

Roscoe Howard’s appointment is part of a settlement with Washington after US President Donald Trump personally intervened to rescue the telecoms gear maker, accused of violating sanctions against Iran and North Korea

PUBLISHED : Saturday, 25 August, 2018, 2:54am
UPDATED : Wednesday, 12 September, 2018, 2:49pm

US Commerce Secretary Wilbur Ross on Friday named a former federal prosecutor to monitor Chinese telecommunications equipment supplier ZTE Corp as part of the June settlement that allowed it to continue buying American components.

Roscoe Howard, a former US Attorney in Washington, will lead a compliance team to ensure that ZTE, China’s second largest telecoms gear maker, does not illegally sell products with American parts to US sanctioned countries such as Iran and North Korea, according to a Commerce Department statement.

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The team reports to Ross’ department.

Howard, who received his law degree from the University of Virginia in 1977, is a partner in Washington-based law firm Barnes & Thornburg. He served as associate independent counsel during the presidential administrations of Bill Clinton and George H.W. Bush.

“Today’s appointment is the continuation of the unprecedented measures imposed on ZTE by the Department of Commerce,” Ross said.

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ZTE was fined in early 2017 for selling millions of dollars’ worth of equipment that used hardware and software components from US technology companies to Iran’s largest telecoms carrier, and was later said to have sold products to North Korea.

The company paid a US$1 billion fine and agreed to punish the workers involved. In April, the Commerce Department said the company had failed to make good on its promises and reimposed the ban for seven years.

The inability to buy components from US suppliers, including mobile chip supplier Qualcomm, was crippling and led to ZTE closing major operations within weeks. The ban threatened ZTE’s survival and became a source of friction in trade talks between Washington and Beijing.

Trump, in what he called a favour to China’s president, Xi Jinping, directed the Commerce Department to come up with alternative penalties. The result was US$1.4 billion in fines and escrowed accounts, a new board of managers and compliance oversight.

A compromise measure was passed by US lawmakers and signed into law by Trump. The settlement prevents the Pentagon from buying from ZTE but lets the company continue to do business in the US.

Under the latest agreement, the Commerce Department was to select a monitor to oversee ZTE compliance for 10 years.

“My team and I will be vigilant in efforts to ensure that ZTE complies with all US export control laws and regulations,” Howard said.