THE UNITED STATES may have become suddenly gripped by the Covid-19 pandemic, but there is no loosening of its tech contestation with China.
Telecom group ZTE Corp. is under investigation by the US Justice Department for allegedly bribing foreign officials to gain advantages in the world telecom market, according to US media. Authorities have declined to comment on the reports; the company has said that it is ‘fully committed to meeting its legal and compliance obligations’.
Three years ago, ZTE paid $1.2 billion to settle charges that it had violated US export controls and pleaded guilty to shipping equipment from the United States to Iran. The following year, a US judge ordered a further two years of court monitoring of the company after determining that ZTE had not taken the corrective steps agreed in the 2017 settlement.
The reports of ZTE’s alleged infractions come hard on US President Donald Trump signing into law on March 12 a ban on telecoms carriers operating in the United States from buying network equipment from ZTE, Huawei Technologies and other companies ‘deemed a national security threat’.
The law also authorises funding for smaller carriers, usually serving rural communities, to strip out and replace equipment already bought from such suppliers. Sustaining service to rural America (and by extension a bedrock sector of his political base) is a priority for the president in this election year.
On March 11, the Trump administration extended to May 15 the temporary licenses due to expire on April 1 that allow some US firms to keep doing business with Chinese tech firms, despite Huawei being added to the administration’s trade blacklist in May. The extension cited the need for rural carriers to be able to continue to service customers in some of the most remote areas of the United States.
The US Commerce Department has also sought public comments on whether there should be future extensions, typically a prelude for future rulemaking, likely in this case to be an ending of the licences.