US Lawmakers Target China’s ZTE With Sanctions Bill

February 6, 2019 Updated: February 6, 2019

WASHINGTON—A bipartisan group of senators introduced a bill on Feb. 5 that would reimpose sanctions on ZTE Corp if the Chinese telecommunications firm fails to live up to U.S. laws and an agreement with the Trump administration.

In July 2018, U.S. President Donald Trump decided to lift a ban on U.S. companies selling to ZTE, allowing the Chinese company to resume business.

ZTE broke a previous agreement and was caught illegally shipping U.S.-origin goods to Iran and North Korea, Commerce Department officials said. ZTE pleaded guilty last year over the sanctions violations.

ZTE was forced to stop most business operations between April and July, when it paid $1.4 billion in penalties to lift the sanctions.

Republican Senators Marco Rubio, Susan Collins and Jerry Moran sponsored the legislation along with Democratic Senators Chris Van Hollen, Mark Warner, Elizabeth Warren and Doug Jones.

The bill comes just days after top U.S. officials met with their counterparts from China in Washington to try to hammer out an agreement to end a trade war between the world’s two biggest economies.

It also comes as the United States tries to extradite the chief financial officer of Huawei Technologies Co Ltd. Canada detained Meng Wanzhou in December at the request of U.S. authorities investigating Huawei’s alleged scheme to use the global banking system to evade U.S. sanctions against Iran. Meng has been released on bail and is confined to her home in Vancouver.

U.S. prosecutors allege that Meng committed fraud by telling banks in the United States that Huawei and Skycom, a Hong Kong-based company reportedly doing business with Iran, had no connections. In reality, Huawei effectively controlled Skycom, according to documents presented during bail hearings in Canadian court.

Many members of Congress view ZTE and Huawei as national security threats, worrying that the use of their technologies in the United States could make it easier for China to steal secrets.

This is the second time lawmakers have introduced a bill on ZTE and sanctions. The previous bill, introduced in September, expired as the previous Congressional session ended.

ZTE did not immediately respond to a request for comment.

The world’s fourth-largest telecommunications equipment maker by market share posted its worst half-year loss of 7.8 billion yuan in August due to U.S. sanctions over violations of export restrictions.

By Diane Bartz. The Epoch Times contributed to this report.

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