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Rubio, Van Hollen Urge Administration to Investigate ZTE Business with the Venezuelan Government
Washington, D.C. – Today U.S. Senators Marco Rubio (R-FL) and Chris Van Hollen (D-MD) wrote to Commerce Secretary Wilbur Ross, Treasury Secretary Steven Mnuchin, and Secretary of State Michael Pompeo about reports of ZTE’s business with the Venezuelan government and the concern that it may violate the Commerce Department agreement reached in June. The senators introduced legislation in September to ensure enforcement of the agreement with the Chinese telecommunications company.
“We write regarding ZTE Corporation’s business in Venezuela after Reuters recently reported that this Chinese state-directed telecommunications firm helped the Venezuelan government to build a database that enables the monitoring and tracking of Venezuelan citizens and, since 2016, to centralize video surveillance. We are concerned that ZTE, by building this database for the Venezuelan government, may have violated U.S. export controls and sanctions laws, as well as the terms of the Commerce Department’s June 2018 superseding settlement agreement with ZTE,” the senators said.
The full text of the letter is below.
Dear Secretaries Ross, Mnuchin, and Pompeo:
We write regarding ZTE Corporation’s business in Venezuela after Reuters recently reported that this Chinese state-directed telecommunications firm helped the Venezuelan government to build a database that enables the monitoring and tracking of Venezuelan citizens and, since 2016, to centralize video surveillance. We are concerned that ZTE, by building this database for the Venezuelan government, may have violated U.S. export controls and sanctions laws, as well as the terms of the Commerce Department’s June 2018 superseding settlement agreement with ZTE.
According to the Reuters investigation, the Venezuelan government hired ZTE to build a database and develop a mobile payment system for a smart ID card. Known as the “carnet de la patria” or the “fatherland card,” this ID card reportedly transmits valuable data about cardholders—including the individual’s birthday, employment and income, property owned, medical history, state benefits received, and membership of a political party and voting status—to computer servers. Reuters notes the Venezuelan government has also increasingly linked this card to essential services such as subsidized food, health and other social programs.
Ahead of Venezuela’s sham elections in May, Venezuelan dictator Nicolas Maduro reportedly used the card to mobilize Venezuelans in support of him. He promised prizes to voters who scanned fatherland cards at kiosks next to polling places. Although the prizes never materialized, voters who scanned their cards received text messages thanking them for supporting Maduro. Some voters may have believed the government would know how they voted, chilling opposition to Maduro and further eroding institutions in Venezuela.
In developing the database for this ID card, ZTE reportedly embedded its employees in a unit of Venezuela’s state telecommunications firm, CANTV—the president of which is subject to U.S. sanctions. In addition, according to documents reviewed by Reuters, ZTE installed data storage units built by U.S. Dell Technologies Inc. Though Dell’s transaction appears to have been with ZTE in China, we are concerned that ZTE may have violated U.S. export controls by misidentifying the end-user or purpose of the end-use.
As you know, ZTE’s history of violating U.S. export controls and sanctions laws is extensive. According to the U.S. Commerce Department, ZTE engaged in a “multi-year conspiracy” to violate U.S. trade embargoes on Iran, North Korea, Sudan, Syria and Cuba, and top ZTE officials also endorsed “multiple strategies” to conceal, obscure, and facilitate the evasion of U.S. laws. ZTE committed at least 96 violations to obstruct and delay the U.S. government’s investigations into its activity. This led, under the June 7, 2018, superseding settlement agreement, to the establishment of a special compliance coordinator who is charged with monitoring ZTE’s compliance with U.S. export controls and sanctions laws as well as with the superseding settlement agreement and June 8, 2018, superseding order.
Given this information, we respectfully ask that you provide responses to our requests for:
- An assessment of whether ZTE has violated U.S. sanctions, including:
- Whether ZTE has materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services to or in support of, any individual subject to U.S. sanctions on Venezuela, including CANTV President Manuel Angel Fernandez Melendez
- Whether ZTE has engaged in actions undermining democratic processes or institutions in Venezuela, or in conduct that constitutes a serious abuse or violation of human rights in Venezuela
- An assessment of whether ZTE violated U.S. export controls with respect to the installation of data storage units built by Dell Technologies Inc. in Venezuela
- An assessment of whether ZTE’s transactions with the Venezuelan government violate the terms of the June 7, 2018, superseding settlement agreement the U.S. Department of Commerce reached with ZTE
We respectfully request that you provide a response to our inquiry within 30 days of receipt of this letter.
RUBIO, VAN HOLLEN INSTAN A LA ADMINISTRACIÓN TRUMP INVESTIGAR LOS NEGOCIOS DE ZTE CON EL GOBIERNO VENEZOLANO
Washington, D.C. – Hoy los senadores estadounidenses Marco Rubio (R-FL) y Chris Van Hollen (D-MD) enviaron una misiva al Secretario de Comercio Wilbur Ross, al Secretario del Tesoro Steven Mnuchin y al Secretario de Estado Michael Pompeo sobre los reportes de vínculos de negocios entre la empresa china ZTE y el gobierno venezolano. Los senadores también mencionaron su preocupación de que tales vínculos de negocios violen el acuerdo del Departamento de Comercio de junio del 2018. Los senadores introdujeron una ley en septiembre del 2018 para garantizar el cumplimiento del acuerdo con la empresa de telecomunicaciones china.
“Escribimos sobre los negocios de ZTE Corporation en Venezuela después de que Reuters informara recientemente que esta firma china de telecomunicaciones dirigida por el estado ayudó al gobierno venezolano a crear una base de datos que permite el monitoreo y seguimiento de los ciudadanos venezolanos desde el 2016. Nos preocupa que ZTE, al crear esta base de datos para el gobierno venezolano, haya violado los controles de exportación y las leyes de sanciones de los Estados Unidos así como los términos del acuerdo de junio de 2018 del Departamento de Comercio”, dijeron los senadores.