US Senators refocus aim on China's ZTE amid likely violations in Venezuela

Senators Marco Rubio and Chris Van Hollen urge Trump admin. to review ZTE's conduct following news of company's role in Maduro's China-style social credit system

(Image from ZTE)

(Image from ZTE)

TAIPEI (Taiwan News) – Chinese telecom giant ZTE once again finds itself in the midst of controversy, with reports that the company may be violating international sanctions in its dealings with Venezuelan state television executives at CANTV.

U.S. Senators Marco Rubio and Chris Van Hollen are urging action from the Trump administration to investigate ZTE’s role in creating a database for a social credit monitoring system in the economically destabilized nation of Venezuela.

In early November, more details were revealed about the China-style social credit system and “Homeland Card” being introduced in the country. It was learned that the ZTE Corporation was filling a central role in designing the nationwide database for the program.

A team from ZTE has even been embedded within Venezuela’s state-run communications company, CANTV, which will be tasked with managing the “homeland database.”

This database will reportedly be used to monitor and track Venezuelan citizens, and to centralize video surveillance in the country.

The president of CANTV, Manuel Fernandez, is also on a list of sanctioned individuals by the U.S. Treasury Department for his role in censoring and limiting Venezuelan citizens' access to online information under the orders of the Maduro government.

Nicolas Maduro, file photo (Associated Press Image)

Rubio and Van Hollen, in a letter addressed to Commerce Secretary Wilbur Ross, Treasury Secretary Steven Mnuchin, and Secretary of State Michael Pompeo declared their concerns on the matter.

“We are concerned that ZTE, by building this database for the Venezuelan government, may have violated U.S. export controls and sanctions laws, as well as the terms of the Commerce Department’s June 2018 superseding settlement agreement with ZTE.”

The renewed scrutiny and concern over new violations of the sanctions follows nearly two years of antagonism between ZTE and the U.S. government over ZTE’s flagrant violation of international sanctions, disingenuous business practices, and efforts to mislead U.S. investigators.

From the Senators’ letter to the administration.

“ZTE engaged in a 'multi-year conspiracy' to violate U.S. trade embargoes on Iran, North Korea, Sudan, Syria, and Cuba, and top ZTE officials also endorsed 'multiple strategies' to conceal, obscure, and facilitate the evasion of U.S. laws. ZTE committed at least 96 violations to obstruct and delay the U.S. government’s investigations into its activity.”

The company was originally set to face crippling fines and a suspension from the U.S. market, but the Trump administration ultimately showed the company leniency, despite being considered a risk to international security by the Pentagon. Some have speculated the president’s decision was made as a direct favor to Xi Jinping.

A settlement agreement was made with ZTE on June 7, 2018 to rescind a majority of the unpaid fines, and to establish a special “compliance coordinator” assigned by the U.S. within the ZTE company. The settlement also forced the company to replace its entire board of executive management.

In the aftermath of the settlement, some dissatisfied Senators attempted to push for reinstating the full penalties and generating a market ban on ZTE with a proposed amendment to the NDAA 2019 legislation, but their efforts were ultimately rebuffed by a bipartisan Senate majority and the administration.

Marco Rubio, file photo (Associated Press Image)

Now, after reports of ZTE’s involvement with CANTV, and the latter's “Homeland” social monitoring system, along with other charges relating to export controls and trade agreements with U.S. company Dell Technologies, U.S. Senators are refocusing their aim on the company.

Since the controversial decision over the summer, Rubio has led the campaign to seek tougher treatment for ZTE's offenses, introducing the “ZTE Enforcement Review and Oversight Act” to the Senate in September.

Recently, fellow Republican Steve Chabot in the House of Representatives introduced the "Zero Tolerance for Electronics Theft Act” or the “ZTE Theft Act” in earlier in November.