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It never pays to lie ... just ask ZTE

Tom Fox | April 23, 2018

The Man From FCPA is continually reminded that much of the basis of compliance is grounded in wisdom imparted by our parents. Today, we are reminded of one of the most basic ones: Do not lie. 

That lesson apparently did not reach Chinese state-owned telecom company ZTE, which engaged in one of the most basic violations of protocols when it apparently lied to the Justice Department about actions it had agreed to take when it secured its Deferred Prosecution Agreement for export control violations. 

The falsehood came after ZTE agreed in its DPA to discipline certain Chinese employees who had engaged in the underlying export control violations in the first instance. But more than failing to discipline the employees, it paid full bonuses to them and then lied about it to U.S. regulators. For this egregious action, the U.S. government banned American companies from selling hardware and software to ZTE for a period of seven years. The ban is seen as a threat to the company...

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