ZTE Enforcement Review and Oversight Act

II 116TH CONGRESS 1ST SESSION S. 335 To require the Secretary of Commerce to ensure that ZTE Corporation complies with all probationary conditions set forth in the settlement agreement entered into between ZTE Corporation and the Bureau of Industry and Security of the Department of Commerce. IN THE SENATE OF THE UNITED STATES FEBRUARY 5, 2019 Mr. RUBIO (for himself, Mr. VAN HOLLEN, Ms. COLLINS, Mr. WARNER, Mr. MORAN, Ms. WARREN, and Mr. JONES) introduced the following bill; which was read twice and referred to the Committee on Banking, Hous- ing, and Urban Affairs A BILL To require the Secretary of Commerce to ensure that ZTE Corporation complies with all probationary conditions set forth in the settlement agreement entered into between ZTE Corporation and the Bureau of Industry and Secu- rity of the Department of Commerce. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘ZTE Enforcement Re- 4 view and Oversight Act’’. 5 VerDate Sep 11 2014 22:19 Feb 13, 2019 Jkt 089200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S335.IS S335 kjohnson on DSK79L0C42 with BILLS 2 •S 335 IS SEC. 2. COMPLIANCE BY ZTE CORPORATION WITH PROBA- 1 TIONARY CONDITIONS OF SETTLEMENT 2 AGREEMENT WITH BUREAU OF INDUSTRY 3 AND SECURITY OF DEPARTMENT OF COM- 4 MERCE. 5 (a) COMPLIANCE WITH SETTLEMENT CONDI- 6 TIONS.—The Secretary of Commerce shall ensure that 7 ZTE Corporation complies with all conditions set forth in 8 paragraph 3 of the settlement agreement that are required 9 of ZTE Corporation during the 10-year probationary pe- 10 riod specified in that paragraph. 11 (b) REPORT ON COMPLIANCE.— 12 (1) IN GENERAL.—Not later than 90 days after 13 the date of the enactment of this Act, and not less 14 frequently than every 90 days thereafter, the Sec- 15 retary of Commerce shall submit to Congress a re- 16 port on the compliance of ZTE Corporation with the 17 conditions described in subsection (a). 18 (2) CERTIFICATION OF COMPLIANCE.—Each re- 19 port submitted under paragraph (1) shall include a 20 certification of whether ZTE Corporation is in full 21 compliance with— 22 (A) the conditions described in subsection 23 (a); and 24 VerDate Sep 11 2014 22:19 Feb 13, 2019 Jkt 089200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S335.IS S335 kjohnson on DSK79L0C42 with BILLS 3 •S 335 IS (B) all sanctions and export control laws of 1 the United States and all licenses and orders 2 issued by the Government of the United States. 3 (c) TRANSMITTAL OF AUDITS.—The Secretary of 4 Commerce shall transmit to the appropriate congressional 5 committees all audits completed by ZTE Corporation pur- 6 suant to paragraph 3.c of the settlement agreement that 7 are provided to the Secretary. 8 (d) PENALTIES.—If the Secretary of Commerce de- 9 termines that ZTE Corporation is not in full compliance 10 with the conditions described in subsection (a), the Sec- 11 retary shall— 12 (1) waive the suspension period described in 13 paragraph 3.h of the settlement agreement for the 14 denial order described in paragraph 3.g of the settle- 15 ment agreement; and 16 (2) require the immediate payment by ZTE 17 Corporation to the Department of Commerce of the 18 $400,000,000 held in escrow pursuant to paragraph 19 3.a of the settlement agreement. 20 (e) DEFINITIONS.—In this section: 21 (1) APPROPRIATE CONGRESSIONAL COMMIT- 22 TEES.—The term ‘‘appropriate congressional com- 23 mittees’’ means— 24 VerDate Sep 11 2014 22:19 Feb 13, 2019 Jkt 089200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S335.IS S335 kjohnson on DSK79L0C42 with BILLS 4 •S 335 IS (A) the Committee on Appropriations, the 1 Committee on Banking, Housing, and Urban 2 Affairs, the Committee on Commerce, Science, 3 and Transportation, the Committee on Foreign 4 Relations, and the Select Committee on Intel- 5 ligence of the Senate; and 6 (B) the Committee on Appropriations, the 7 Committee on Financial Services, the Com- 8 mittee on Energy and Commerce, the Com- 9 mittee on Foreign Affairs, and the Permanent 10 Select Committee on Intelligence of the House 11 of Representatives. 12 (2) SETTLEMENT AGREEMENT.—The term 13 ‘‘settlement agreement’’ means the Superseding Set- 14 tlement Agreement dated June 7, 2018, between 15 Zhongxing Telecommunications Equipment Corpora- 16 tion, ZTE Kangxun Telecommunications Ltd., and 17 the Bureau of Industry and Security of the Depart- 18 ment of Commerce. 19 (3) ZTE CORPORATION.—The term ‘‘ZTE Cor- 20 poration’’ means the Zhongxing Telecommunications 21 Equipment Corporation and any subsidiary of that 22 corporation. 23 Æ VerDate Sep 11 2014 22:19 Feb 13, 2019 Jkt 089200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6301 E:\BILLS\S335.IS S335 kjohnson on DSK79L0C42 with BILLS