Compliance Management, Threat Management, Threat Intelligence

ZTE appoints new C-suite to comply with U.S. settlement, resumes some operations

As the Trump administration gives ZTE, the Chinese company that fell on financial hard times after it was banned from using U.S. technology for violating sanctions on North Korea and Iran, the go-ahead to again open its doors – at least temporarily - to U.S. companies, the communications firm has named a new C-suite.

The company tapped Xu Ziyang, who formerly led its German business, as CEO, replacing Zhao Xianming, and other executives, in an attempt to comply with the terms of a settlement that would lift a seven-year ban imposed by the U.S. in April. The ZTE reported the changes in an exchange filing cited by Reuters.

In 2016, the company was suspected of espionage after researchers discovered backdoors in the phone that could allow the monitoring of user behavior.

In April the Trump administration banned the company, which makes Android smartphones, from using US technology, after it sold hardware incorporating American technology to Iran and North Korea in violation of U.S. sanctions. ZTE was also pegged by the intelligence community as posing a security risk to the U.S. after researchers discovered backdoors in its Android phones that could allow the monitoring of user behavior.

The company agreed to pay a $1.2 billion fine in March, but soon after, Commerce Department officials discovered the company had rewarded rather than punished the company execs responsible for the violations and the U.S. subsequently implemented a “denial order” prohibiting U.S. companies from selling their goods to ZTE for seven years.

The actions effectively crippled the firm. While the U.S. and China worked to hammer out an agreement that would prevent a trade war as the two countries threatened to raise tariffs, the Trump administration reached a deal to help bolster ZTE, requiring it to pay a $1 billion fine, put $400 million in escrow, hire a compliance officer and replace its management team.

Last week, ZTE elected Li Zixue as chairman of the board and replaced its 14 members, Nikkei Asian Review reported.

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