US Congress sides with Trump, gives ZTE new lease on life with NDAA bill

Despite potential risks to national security, US Congress will not seek to reimpose penalties on the Chinese telecom company

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File Photo

File Photo (By Associated Press)

TAIPEI (Taiwan News) – U.S. Congress has approved a final draft of the 2019 NDAA legislation which President Trump is expected to sign into law in the coming weeks.

However despite provisions in the NDAA Act that will increase defense cooperation between Taiwan and the U.S., many U.S. lawmakers and observers are upset that the proposed amendments for the NDAA package that would have punished the Chinese telecom company ZTE Corp. were not included in the final draft.

Despite violating Iran sanctions, and being considered a risk to international security by the Pentagon, the Trump administration has been incredibly lenient on the ZTE company. If it were not for the intervention of Trump, many speculate that ZTE would have already announced bankruptcy and closed its doors.

In addition to reinstating the original penalties called for after ZTE violated the sanctions, the amendment proposed by both Republican and Democrat Senators would have sent a strong message to China about the theft of intellectual property and espionage operations, which ZTE is rumored to be heavily involved in.

In reaction to the news that the House and Senate committees negotiating the final draft of the NDAA legislation had excluded the amendment targeting ZTE, Florida Senator Marco Rubio released the following press statement expressing disappointment in his colleagues:

“No nation steals American intellectual property or spies on America more than China, and Chinese telecommunication companies are among the most powerful tools they use to do this. That is why I fought so hard last month to put ZTE out of business. And that is why I am so shocked that some of my colleagues decided to let ZTE continue to do business. Once again, China has figured out how to play the United States. We can’t continue to let this happen.”

Speaking in an interview with CNN, Rubio explained that he and Trump had spoken previously about the issue but that Trump only viewed ZTE as a sanction’s violator, and not as a threat to U.S. national security, while Rubio views them as a significant threat for potential espionage or IP theft operations.

Now instead of potentially going out of business, it has been reported that ZTE shares jumped 4 percent on the stock market after news that Congress would not pursue reinstating the penalties.

According to Global Trade Magazine, ZTE will now pay US$1 billion in fines and place US$400 million in trust with an approved third party before the U.S. Commerce Dept. will remove ZTE and its representatives from the Bureau of Industry and Security’s Denied Person’s List.

ZTE has already paid US$892 million in fines in accordance with a March 2017 ruling on their trade violations. The corporation also had to replace all of their executive board and will need to maintain a team of U.S. approved compliance coordinators for the next 10 years.

Democratic Senator Chris Van Hollen released statement on Twitter critisizing Republican leadership and President Trump for the decision to go easy on ZTE.