[00:00.04]Secretary of Commerce Wilbur Ross announced that
[00:02.88]the U.S. Department of Commerce's Bureau of Industry and Security
[00:07.08]has imposed a denial of export privileges against
[00:10.84]Zhongxing Telecommunications Equipment Corporation, of Shenzhen, China,
[00:15.76]and ZTE Kangxun Telecommunications Ltd. of Hi-New Shenzhen, or collectively, "ZTE".
[00:23.44]In March 2017, ZTE agreed to a combined civil and criminal penalty and forfeiture
[00:30.16]of $1.19 billion after illegally shipping telecommunications equipment
[00:35.76]to Iran and North Korea, making false statements, and obstructing justice
[00:40.12]including through preventing disclosure to and affirmatively misleading the U.S. Government.
[00:45.76]In addition to these monetary penalties, ZTE also agreed
[00:50.16]to a seven-year suspended denial of export privileges, which could be activated
[00:55.12]if any aspect of the agreement was not met and/or if the company
[00:59.76]committed additional violations of the Export Administration Regulations.
[01:04.80]The Department of Commerce has now determined ZTE made false statements
[01:09.52]to Bureau of Industry and Security in 2016,  during settlement negotiations,
[01:15.44]and 2017, during the probationary period, related to senior employee disciplinary actions
[01:22.40]the company said it was taking or had already taken.
[01:25.96]ZTE's false statements only were reported to the U.S. Government
[01:30.12]after Bureau of Industry and Security requested information
[01:34.16]and documentation showing that employee discipline had occurred.
[01:38.32]"ZTE made false statements to the U.S. Government
[01:41.84]when they were originally caught and put on the Entity List,
[01:45.36]made false statements during the reprieve it was given,
[01:48.40]and made false statements again during its probation."
[01:51.52]said Secretary of Commerce Ross.
[01:53.76]These false statements covered up the fact that ZTE
[01:57.12]paid full bonuses to employees that had engaged in illegal conduct,
[02:02.32]and failed to issue letters of reprimand.
[02:05.00]"ZTE misled the Department of Commerce," Secretary Ross said.
[02:09.00]"Instead of reprimanding ZTE staff and senior management,
[02:12.96]ZTE rewarded them.
[02:14.92]This egregious behavior cannot be ignored."