Chinese telecom company ZTE faces another major investigation in the United States as authorities move ahead with a new probe into alleged ‘ foreign bribery ‘. The potential payout crosses the $1 billion mark, adding to the company’s long record of penalties. The focus stays on alleged misconduct tied to overseas contracts.
Not to mention, ZTE has already paid roughly $2 billion in earlier penalties. Those payments came when the company faced consequences for export violations. The latest investigation centers on possible bribes linked to telecom deals in several regions.
According to Reuters , the US Department of Justice has advanced its investigation into whether ZTE violated the Foreign Corrupt Practices Act (FCPA). The law bans American companies and individuals, plus foreign companies listed on US exchanges, from bribing foreign officials for business advantages. It applies globally, punishing both companies and individuals with fines for violations.
A New Break in the Case
Reuters also reports that US officials are working on a potential settlement that could force ZTE to pay more than $1 billion. One source suggests the figure could touch $2 billion based on alleged profits from contracts. When the news broke, ZTE’s shares dropped by a fair margin in both Hong Kong and Shenzhen.
In a statement, the company said it remains in contact with the Justice Department about the investigation.
“The Company consistently commits to comprehensively strengthening its compliance system and building an industry-leading compliance framework,” ZTE said. “The Company opposes all forms of corruption and maintains a zero-tolerance policy toward any individuals who may be involved in such activities.”
Meanwhile, the Justice Department declined to comment , so we have no idea when a settlement might materialize. Even if there are talks of a settlement, any agreement with the United States needs approval from Chinese authorities. Liu Pengyu, a spokesperson for the Chinese embassy, gave this statement: “China has always required Chinese companies to operate legally abroad and abide by local laws and regulations.”
Back in 2017, ZTE pleaded guilty to illegally exporting US goods to Iran and paid $892 million. Following the very next year, they paid another $1 billion to lift a ban that had cut off access to American chips and software.
This penalty threatens ZTE’s financial stability in the long term. Last year, the company posted around $1.16 billion in profit, so another sanction could strain its operations. Without a settlement, the US could even reinstate the earlier export ban that once shut down ZTE’s supply of American components.
