ZTE Settlement Highlights Broad Extraterritorial Application of U.S. Sanctions and Export Controls to Non-U.S. Companies 中兴通讯和解案揭示,美国政府对非美国公司的制裁和出口管制的域外适用非常广泛

International Trade & Compliance Alert | 03.14.17

On March 7, U.S. authorities settled criminal and civil proceedings involving Zhongxing Telecommunications Equipment Corporation and certain of its affiliates (“ZTE”).  ZTE is the largest publicly traded telecommunications manufacturer in China and the fourth largest telecommunications manufacturer in the world.

Charges against ZTE centered on allegations that the company supplied electronics products to Iran and North Korea in violation of U.S. economic sanctions and export controls.  If the settlement is fully implemented, ZTE will pay at least $892 million, and as much as $1.19 billion, in fines and other penalties and endure years of intrusive U.S. government oversight.  This is the largest penalty U.S. officials have ever imposed on a non-financial entity for violations of U.S. trade sanctions. 

In a spectacular way, the ZTE settlement reinforces that non-U.S. companies should carefully assess whether their international activities implicate U.S. trade rules.

U.S. Sanctions and Export Controls

The ZTE settlement concerns U.S. requirements that generally forbid:

  1. all exports from the United States of goods, services, software and technical information to Iran, North Korea and other U.S.-embargoed locations;

  2. all supply by U.S. persons from outside the United States of such items to U.S.-embargoed locations; and

  3. supply by anyone – including non-U.S. companies – of certain such items from outside the United States to U.S.-embargoed locations if the items originated in the United States or if they contain specified levels of U.S.-origin content.

“United States persons” are U.S. citizens and permanent resident aliens, legal entities organized under U.S. law, and anyone acting in the United States.

The requirements include economic sanctions regulations administered by the U.S. Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) and sanctions-related export controls administered by the U.S. Department of Commerce’s Bureau of Industry and Security (“BIS”). 

The third type of U.S. trade prohibition described above is often critical to non-U.S. companies.  In its broad exercise of extraterritorial jurisdiction, U.S. authorities apply sanctions and export controls to trade by non-U.S. companies operating abroad based merely on the fact that the traded item (good, service, software or technical information) was created in the United States or contains some level of content that was created in the United States.

ZTE Settlement

ZTE pled guilty to criminal charges that it conspired to violate sanctions and export control requirements through unauthorized supply of products to Iran, obstructed justice and made false representations to the U.S. government.  ZTE simultaneously settled civil sanctions and export control claims brought by OFAC, without admitting guilt, and by BIS, admitting the alleged violations. 

While ZTE reportedly gained around $143.5 million as a result of the alleged violations, the company agreed to pay over $892.3 million in fines and civil penalties, including paying over $430.4 million for criminal violations, with an additional $300 million payment obligation conditionally suspended over a seven-year probationary period.  In addition, ZTE agreed to far-reaching commitments involving, among other features, an independent monitor of its operations, a program of compliance auditing, maintenance of compliance program arrangements and cooperation with U.S. authorities.  

United States government agencies have emphasized allegations that ZTE, among other things, bought export-controlled U.S.-origin components, incorporated them into ZTE network infrastructure products and supplied those products to Iran.  They have also stressed allegations that ZTE took elaborate steps to hide these activities from U.S. authorities and mislead enforcement officials.

Learning From the ZTE Settlement

First, the ZTE settlement shows that U.S. authorities are serious about enforcing sanctions and export controls to the full, unusually broad extent of their extraterritorial application.  This is underscored by the disparity between the reported proceeds from alleged unlawful activity and the monetary penalties and nonmonetary arrangements, which will no doubt occasion enormous additional cost and business disruption. 

While the case was investigated and prosecuted by the Obama administration, the penalties were imposed as one of the first actions of the Trump administration, with the Attorney General, Secretary of the Treasury and Secretary of Commerce announcing their respective agencies’ resolutions of the case.  The Secretary of Commerce stressed, “We are putting the world on notice: the games are over . . . .  Those who flout our economic sanctions and export control laws will not go unpunished – they will suffer the harshest of consequences.”

Second, the ZTE case is extraordinary in at least two respects:  (i) ZTE reportedly engaged in premeditated and deliberate, systematic and sustained, and concealed and covered-up violations of U.S. laws; and (ii) the evidence was clear-cut – ZTE’s highest level management, with the participation of its General Counsel, laid out in writing a plan to engage in these violations.  In such an egregious case, the Department of Justice could be expected to seek to prosecute individuals involved in the violations.  What may have avoided this result in these circumstances are the government-to-government concerns that derive from the difference between U.S. and Chinese Iran-related sanctions and export control measures.  Non-Chinese companies’ executives may not be so fortunate in cases of noncompliance.

Third, a linchpin of the theory of liability is ZTE’s alleged supply to Iran of non-U.S. origin products manufactured outside the United States by a non-U.S. company due to their incorporation of U.S.-origin components.  While the extraterritorial application of U.S. sanctions and export controls may be suspect as a matter of international law, the U.S. government has substantial leverage to extract significant settlements from non-U.S. companies. 

In this case, the main source of leverage over ZTE was the U.S. government’s ability to block ZTE’s access to U.S. components, parts and technologies.  This would have crippled the company’s ability to develop and manufacture its products globally.  Indeed, the U.S. government issued a temporary license to enable ZTE to continue to deal with U.S. companies pending resolution of the enforcement action. 

This leverage of the U.S. government enables it to extract severe settlement terms – including terms grossly disproportionate to the relative business value of a non-U.S. company’s activities relating to embargoed jurisdictions as long as such company’s business strategy requires access to the U.S. market.  Moreover, there can be no doubt that the U.S. government can and will treat the theory of liability based on the U.S. source of parts and technology as the basis for major assessments of penalties – including criminal penalties. 

Under these circumstances, non-U.S. companies’ development and promotion of effective trade compliance safeguards are plainly worthwhile if they prevent a fraction of the adverse implications of the ZTE settlement.

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3月7日,美国政府与中兴通讯股份有限公司及其关联公司(以下统称“中兴”)就涉及该司的刑事及民事诉讼达成和解。中兴是中国最大的上市电信设备制造商,同时也是全球第四大电信设备制造商。

美国对中兴的控诉主要是围绕中兴违反美国的经济制裁和出口管制法律法规,向伊朗和北朝鲜提供电子产品的指控。如果此和解协议完全执行,中兴将支付至少8.92亿美元(最高可达11.9亿美元)的罚款和承担其他处罚,中兴还需接受美国政府接下来几年干预式的合规监管。这是美国官方对违反美国贸易制裁的非金融实体做出的最高额罚款。

此次的中兴和解案为其他非美国公司敲响了警钟,非美国公司都应当严肃审慎地检视其国际活动板块是否会牵涉到美国贸易相关法律法规。

美国制裁和出口管制

此次中兴和解案涉及的美国法律法规包含以下禁止内容:

  1. 禁止所有货物、服务、软件和技术信息从美国出口至伊朗、北朝鲜和其他被美国贸易禁运覆盖的区域;

  2. 禁止所有美国人(“U.S. persons”)在美国之外将这些商品供应至被美国贸易禁运覆盖的区域;及

  3. 如果商品是源于美国的或至少包含一定源于美国的成分的,那么禁止任何人 – 包括非美国公司 – 将这些商品在美国之外供应至被美国贸易禁运覆盖的区域。

上述的“美国人”,指的是美国公民、有永久居留资格的外国人、在美国法下成立的法律实体,以及任何在美国领土内行动的人。

这些法律法规包括由美国财政部海外资产控制办公室(“OFAC”)管理的经济制裁规定,也包括由美国商务部工业与安全局(“BIS”)管理的和制裁相关的出口管制规定。

上述的第三种美国贸易禁令对于非美国公司来说是极为关键的。在其宽泛的境外管辖框架下,美国政府仅根据贸易商品(货物、服务、软件或技术信息)是在美国境内创造或包含至少一定的在美国境内创造的成分,即对在境外运营的非美国公司的贸易适用美国制裁和出口管制相关法律法规。

中兴的和解协议

中兴就美国政府对其未经授权向伊朗供应商品、密谋策划违反制裁和出口管制要求、阻碍公正和向美国政府做出虚假陈述的刑事指控,做了有罪答辩。中兴同时与OFAC和BIS就其提起的制裁和出口管控相关的民事诉讼达成和解,中兴并未承认 OFAC提出的指控,但承认了BIS指控的违规行为。

虽然据报告称,中兴从其被控的非法行为中获得约1.435亿美元,但是中兴同意支付超过8.923亿美元罚金和其他民事处罚,包括支付超过4.304亿美元的刑事罚金,另外需给BIS的3亿美元罚金暂缓支付,视未来七年中兴遵守和解协议并接受独立的合规审计及监管的情况而定。此外,中兴还同意做出一些深远广泛的承诺,其中包括同意对其公司运营设立独立监管人、成立公司合规审计项目、维持合规项目运行,以及保持与美国政府的协作。

美国政府机构强调了对中兴购买源于美国、受美国出口管制的商品成分,将它们融合进中兴基础网络设备产品,以及最终将这些产品供应给伊朗的指控。美国政府同时强调了对中兴故意精心设计以将这些活动隐瞒于美国政府、误导执法官员的指控。

从本和解案中获得的经验

首先,中兴和解案表明了美国政府有意将经济制裁和出口管制在美国境外进行完全的、非常广泛的适用。这体现在报告所称的中兴从被控非法活动中所获的收益与被处罚金和其他非金钱处罚措施之间的不相称性,非金钱处罚措施无疑将会产生巨大的额外成本和对中兴商业活动的干扰。

虽然此案是由奥巴马政府进行调查和起诉,但这些处罚却是特朗普政府的第一批行动之一,其司法部长,财政部长和商务部长宣布了各自机构对该案的决议。美国商务部长强调:“我们提醒全世界注意:游戏结束了……那些藐视我们经济制裁和出口管制法律的人将难逃惩罚——他们将遭受最严重的后果”。

第二,中兴案有以下两个特别之处:(i)报告称中兴的行为有预谋和故意,系统而持续,并有隐藏和遮掩等违反美国法律的行为;(ii)证据明确 ——报告称有确凿证据显示中兴通讯的最高层管理层,与其法律总管一同参与制定了从事这些违法行为的计划。 在这种极端的情况下,司法部可以设法起诉参与违法行为的个人。基于某些原因,本案避免了这一结果,但非中国公司的高管在违规案件中可能就不会有那么幸运。

第三,本案中中兴需承担责任的理论关键点在于,中兴向伊朗所提供的,即由非美国公司在美国境外生产的非源于美国的产品,包含了源于美国的产品部件。虽然美国的制裁和出口管制法律法规的域外适用可能是一个国际法上的问题,但美国政府拥有重要的筹码使其能够与非美国公司达成重大的和解协议。

本案中,对中兴通讯所持的筹码主要来自于美国政府具有阻止中兴获得美国的组件、零部件和技术的能力。不能获得这些东西将削弱中兴在全球开发和制造产品的能力。实际上,美国政府对中兴颁发了临时许可,使其在待执法行动决议期间能够继续与美国公司进行交易。

美国政府的这一筹码使其能够达成严苛的和解条款——包括让非美国公司接受与其和禁运管辖区有关活动的商业价值严重不成比例的条件(只要该公司的业务战略需要进入美国市场)。另外,美国政府也毫无疑问可以并将会利用处罚对象使用了来源于美国的零件和技术这套责任理论作为主要理由对其该受的处罚(包括刑事处罚)做出评估。

这种情况下,对非美国公司来说,如果发展和促进有效的贸易合规保障措施能预防类似于中兴和解案所带来的那种不利影响,哪怕仅是一小部分,都是非常值得的。