Commerce Dep. Changes Position On ZTE Monitor Due To Trump

Former federal prosecutor Roscoe Howard has been appointed to monitor Chinese technology company ZTE following its issues with the Commerce Department that saw it threatened by bankruptcy earlier this year, having been given the role that was originally offered to Peter Lichtenbaum, an ex-official of the same agency, Reuters reports. Insiders claim that Mr. Lichtenbaum received the offer last Wednesday, August 15, but Commerce Secretary Wilbur Ross ended up rescinding it two days later after learning that he was among a small group of national security officials who signed an August 2016 letter claiming Donald Trump isn’t fit to be President and asserting they would never vote for him to take the highest office in the country.

Mr. Howard will now be the person responsible for leading a team of at least half a dozen officials who will monitor ZTE for any kind of future trade regulation violations. The unit will be funded by ZTE itself, which the Chinese company agreed to as part of its July settlement with the Commerce Department. After being found guilty of breaking trade embargoes the U.S. imposed on Iran and North Korea last year, ZTE agreed to pay a fine of almost $900 million and agreed to discipline 35 employees involved in the matter by either reprimanding them or withholding their annual bonuses. It failed to do the latter and repeatedly lied to Washington’s investigators over the matter, the Commerce Department said in April, consequently hitting the Chinese manufacturer with a seven-year ban on purchasing American technologies that would have likely bankrupted it by next year if it stayed in place.

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The sanction was replaced last month with a series of less damaging concessions, including ZTE’s agreement to fund an independent monitoring team that will now be helmed by Mr. Howard. The firm also paid another $1 billion fine, made an extra $400-million escrow payment, and agreed to purchase more American goods over a finite near-term period, in addition to replacing the entirety of its board and management, a condition it already fulfilled. Mr. Howard’s team will supervise ZTE for any future violations over the next ten years, as per the same settlement.

Opponents of the current administration repeatedly argued the fact that ZTE was allowed to stay in business after two serious trade transgressions is evidence that President Trump is weak on China. Even some Republican lawmakers such as Florida Senator Marco Rubio criticized the President over the matter, stating that the settlement doesn’t address the issue of a national security threat that China-owned ZTE is said to pose, according to some intelligence reports. The Shenzhen-based firm argued it self-reported its non-compliance with the settlement, claiming the thereof stemmed from an accidental issue and that the seven-year denial order was hence too harsh of a punishment for the transgression. In June, White House trade adviser Peter Navarro claimed the ZTE lifeline was President Trump’s “personal favor” to China’s head Xi Jinping, relating the development to Washington’s ongoing trade dispute with Beijing.


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