Kelley Drye

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On June 7th, Secretary of Commerce Wilbur Ross announced that the U.S. government reached an agreement with ZTE Corporation (ZTE) to lift a denial order suspending the export privileges of ZTE for a period of seven years.  Under this new agreement, ZTE must pay $1 billion and place an additional $400 million in escrow in a U.S.-approved bank within 90 days of this superseding order.  The Bureau of Industry and Security (BIS) will lift the denial order after the payment has been received and notify the public that ZTE has been removed from the Denied Persons List.

In addition to the civil monetary penalty, ZTE must adhere to several other conditions under the new agreement, which collectively are the most severe penalty BIS has ever imposed on a company.  Most notably:…
Continue Reading U.S. Government and ZTE Agree to Have Denial Order Lifted Upon Payment of Penalty

On April 15, 2018, the Bureau of Industry and Security (BIS) issued an Order relating to Zhongxing Telecommunications Equipment Corporation and ZTE Kangxun Telecommunications Ltd. (collectively, ZTE) that suspends the export privileges of ZTE for a period of seven years, until March 13, 2025.  Pursuant to the Order, ZTE may not, directly or indirectly, participate…

A bipartisan group of co-sponsors in both the House and the Senate recently introduced the Foreign Investment Risk Review Modernization Act (“FIRRMA”).  These substantively identical bills demonstrate that Congress is now considering increasing the scrutiny of foreign investment in the U.S., particularly from China.

The Committee on Foreign Investment in the United States (“CFIUS”) is the interagency body is responsible for reviewing incoming foreign investments for national security risks, so long as they are “covered transactions.”  FIRRMA would broaden the scope of “covered transactions” to include, among other things: the purchase or lease by a foreign person of real estate located near U.S. military or national security interests; non-passive investments in critical technologies or critical infrastructure; and the contribution of U.S. critical technology to a foreign person, including through joint ventures, among others.  The bills would also update certain terms and definitions, including “critical technology,” which can include emerging technologies that are not necessarily controlled for export.  Notably, FIRRMA would not extend CFIUS jurisdiction to “greenfield” investments, which the regulations carve out from CFIUS review. …
Continue Reading Congress Proposes Increased Scrutiny on Foreign Investments in the U.S.