[Global Network Technology Comprehensive Report] On March 7, 2017, ZTE Corporation announced today that the company has reached a settlement with the U.S. government on the U.S. government's export control investigation case. The agreement signed by ZTE and the U.S. Department of the Treasury’s Overseas Asset Control Office will become effective. The agreement with the U.S. Department of Justice shall come into force after the approval of the North District Court of Texas. The court's approval of the agreement with the U.S. Department of Justice is a prerequisite for the issuance of the U.S. Department of Commerce’s Bureau of Industry and Security (BIS) with its ZTE reconciliation order. As part of the settlement agreement, ZTE agreed to pay US$892,360,064 in criminal and civil penalties. In addition, a fine of US$300,000,000 to the US Department of Commerce’s Bureau of Industry and Security was suspended. Whether or not to pay depends on the company's compliance with the agreement in the next seven years and continues to be subject to independent compliance supervision and auditing. Dr. Zhao Xianming, Chairman and CEO of ZTE Corporation, stated that “ZTE Corporation has admitted that it violates US export control laws and regulations and is willing to assume corresponding responsibilities. The company will continue to actively commit to change, and has established new compliance procedures and conducted major personnel We have learned a lot of lessons from this experience and will strive to become a model of compliance in export control compliance and work hard to build a new compliance, health, and trustworthy ZTE Corporation." Dr. Zhao Xianming was appointed chairman and CEO of ZTE in April 2016. He is determined to build a new ZTE that has a first-rate export control compliance system. Dr. Zhao Xianming said: “Achieving a settlement with the U.S. government will enable ZTE to gain a more solid foundation for future development. We thank all customers, partners, employees, and stakeholders for supporting us in the most difficult times. With the signing of the settlement agreement and the establishment of a sound compliance system, we are confident to continue to cooperate with all partners including customers and suppliers to achieve business growth, continue to provide innovative technological solutions, and implement our development strategy. , to create a new ZTE." Mr. Matt Bell, a US lawyer, was appointed chief export control compliance officer of ZTE Corporation in November 2016. He stated that “ZTE has made great progress in establishing a world-class compliance system. I look forward to working with company management. Efforts to further establish and improve our business operations and processes.We are creating a global team of experienced compliance professionals.At the same time, we have strengthened compliance training at all levels of the company.We constantly review and Improve systems and processes to adapt to changing trends in compliance, and strive to use strong compliance systems to strengthen our strategic advantages in the market. Our global legal and compliance professionals will continue to identify company risks. And continuously improve the efficiency of the compliance system." Under the leadership of Dr. Zhao Xianming, ZTE focuses on strengthening its process control measures and continues to build a strong compliance culture throughout the organization. In recent months, the company has undergone major changes to create a leading export compliance system, and has taken the following measures: New CEO and company management team. ZTE appointed Dr. Zhao Xianming as the chairman and CEO, and made major adjustments to the senior management team. All members of the management team shouldered the mission of building a new ZTE Corporation with a first-rate export control and compliance system. New Compliance Management Committee. ZTE has established a new Compliance Management Committee led by the CEO to make significant changes to the company's system and processes, and to strengthen the attention and support for compliance management. Reorganization of Legal and Compliance Management Department. ZTE has separated the compliance function from the legal department, established an independent compliance management department, increased compliance professionals, and ensured the independence of the compliance department. Appoints an American lawyer as the chief export compliance officer. Appointed US lawyer Matt Bell as the company's chief export control compliance officer, responsible for overseeing and advancing the continuous development and improvement of the global export control compliance system. Mr. Matt Bell has created and improved a compliance system for large multinational companies and has extensive experience in the industry. Improve the Export Control Compliance Manual. ZTE has issued a new "Export Control Compliance Manual" reviewed by BIS to provide employees with more detailed compliance guidelines. At present, ZTE requires all employees to sign the "Commitment of Commitment" every year. New automated tools and processes. ZTE has adopted a new automated management and control tool to scan ZTE's products and some of its subsidiaries' shipments to meet export control requirements. The system can automatically identify items subject to the US Export Control Regulations (EAR) and regulated transaction counterparts, intercept shipments that require detailed code analysis, and apply for permits or permits. ZTE will continue to increase investment in automation compliance management and promote it to subsidiaries around the world. Global export control training. In 2016, ZTE Corporation has trained more than 45,000 employees worldwide in laws and regulations related to export control and sanctions and company-related policies. In 2017, ZTE will continue to provide general awareness training for all staff and conduct targeted training for key departments such as sales, procurement, research and development, and supply chain. After the court approves the agreement of the Ministry of Justice and the issuance of settlement orders by the US Department of Commerce’s Bureau of Industry and Security, the Bureau of Industry and Security will recommend removing ZTE from the list of entities. Dr. Zhao Xianming emphasized: "ZTE has established a good partnership with many U.S. suppliers and provided nearly 130,000 high-tech jobs. As we continue to improve our operational efficiency and strengthen our leadership in innovation on 5G, ZTE expects to achieve a good overall performance. With the support of global partners, the company expects to maintain its business growth and expansion in the next few years."