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WASHINGTON, DC 20510

June 25, 2018

The Honorable Wilbur Ross

Secretary ofCommerce

US. Department of Commerce

14th Street and Constitution Avenue, NW.
Washington, DC. 20230

Dear Secretary Ross:

We write to urge the Commerce Department to immediately provide assurances, in the
form of guidance and waivers, to both telecommunications operators and other customers who
wish to remove ZTE software, hardware, and technology items?) from their network
infrastructure and install products from other suppliers in the market, as well as to suppliers who
are in compliance with US. export controls and seek to provide these customers with alternative
products to ZTE items.

We strongly support the decision by the Commerce Department?s Bureau of Industry and
Security to impose the Order Activating Suspended Denial Order Relating to Zhongxing
Telecommunications Equipment Corporation and ZTE Kangxun Telecommunications Ltd. of
April 15, 2018 (?Denial Order?). The Denial Order?which, among other things, banned ZTE
from buying U.S. components for seven years?came in response to the Chinese firm?s
numerous violations of US. export controls and sanctions laws. More generally, it is clear that
Chinese state-directed telecommunications companies like ZTE and Huawei are used by the
Chinese government and Communist Party for espionage and intellectual property theft, and
therefore pose a direct threat to the national security, people, and economy of the United States.

We are concerned to hear, however, that the Commerce Department and its Bureau of
Industry and Security have repeatedly declined to provide clarity on a specific element of the
Denial Order that has created uncertainty. Part of the Denial Order, which imposes a prohibition
on anyone servicing ZTE items, states that:

?no person may, directly or indirectly ]ngage in any transaction to service any
item subject to the Regulations that has been or will be exported by a Denied Person, or
service any item, of whatever origin, that is owned possessed or controlled by a Denied
Person if such service involves the use of any item subject to the Regulations that has
been or will be exported ?rom the United States. For purposes of this paragraph,
servicing means installation, maintenance, repair, modi?cation, or testing? (emphasis

added).

The Denial Order?s prohibition on servicing, in turn, has created uncertainty as to whether
telecommunications operators and other customers can take actions to remove ZTE items from
their network infrastructure and install products from other suppliers, and whether other
suppliers can take actions to provide these customers with alternative products to ZTE items.

The Superseding Order Relating to Zhongxing Telecommunications Equipment
Corporation and ZTE Kangxun Telecommunications Ltd. of June 8, 2018 (?Superseding Order?)
and the Superseding Settlement Agreement of June 7, 2018 (?Superseding Settlement?)??which
we oppose because they lift the seven-year ban against ability to purchase U.S.
components?added to this uncertainty. While the Superseding Order and Superseding
Settlement make clear that the Denial Order will remain temporarily in place until ZTE ful?lls a
set of conditions, neither document addressed the uncertainty that was created by the Denial
Order?s prohibition on servicing for telecommunications operators and other customers Wishing
to swap out ZTE items and suppliers seeking to provide alternative products.

The Commerce Department and its Bureau of Industry and Security?s reluctance to
clarify such uncertainty is patently unjust to customers who have had no part in the malign
conduct that caused ZTE to be penalized in the ?rst place. It is also profoundly unfair to other
suppliers who, unlike ZTE, have complied with U.S. export controls and sanctions
laws. Moreover, enabling ZTE to continue effectively bene?ting from such uncertainty at the
expense of other market participants runs directly counter to U.S. foreign policy, national
security interests, and values.

Suppliers who are seeking to comply with U.S. export laws deserve the clarity and
authorizations that they require to support customers who have opted against ZTE while the
Denial Order?s prohibition on servicing remains in place and thereafter. We therefore request
the Commerce Department and its Bureau of Industry and Security to respond accordingly, and
to immediately provide requested assurances, in the form of guidance and waivers, to customers
wishing to remove ZTE items from their network infrastructure and suppliers seeking to provide
alternative products.

 

Sincerely,
My 7/01/14 
Marco Rubio Chris Van Hollen Tom Cotton

U.S. Senator U.S. Senator U.S. Senator