Timothy O'Toole Comments on ZTE Sanctions Confusion in Global Investigations Review

"Trump's ZTE Intrusion Sparks 'Chaos' in Companies"

Global Investigations Review


Timothy O'Toole commented on companies' confusion regarding how to navigate relationships with Chinese telecommunications equipment manufacturer ZTE. The company was hit with an enforcement action from the U.S. Department of Commerce for breaching U.S. sanctions, but President Trump tweeted that he was working to get ZTE "back into business, fast," which has left companies unsure of how they should adapt their compliance programs. The saga "has created a little bit of a mess in terms of what companies are supposed to do at this point, when they're getting such mixed signals," O'Toole said. "My clients are complying full speed ahead with the ZTE order, with one eye watching the news that comes out about whether this order will disappear. They will spend the money to comply with the order but would really rather not spend that money if the order is going to go away," he said. The president's involvement in the ZTE matter could also influence the Department of Justice's (DOJ's) alleged probe of Huawei Technologies, another Chinese telecommunications company facing an investigation of potential sanctions violations. "If the Commerce Department is instructed to let ZTE have a pass it is hard to see how they [US authorities] would have any leverage in the Huawei investigation, if there is one," O'Toole said.