China’s telecom equipment maker ZTE Corp is again under pressure from U.S. authorities. Prosecutors are weighing a settlement that could cost the company more than $1 billion. The talks relate to allegations of foreign bribery linked to ZTE’s overseas contracts, according to people familiar with the discussions.
U.S. officials are examining whether the company violated the Foreign Corrupt Practices Act. That statute bars companies from bribing foreign officials to win or keep business. Investigators believe some of the alleged misconduct occurred as recently as 2018. Contracts in South America, among other regions, remain central to the probe. Although no deal is final, sources say the penalty could exceed $1 billion and rise further depending on the gains tied to the alleged conduct.
https://wallstreetwhistleblower.org/2025/07/24/international-sting-operation-crushes-eur-3-million-investment-fraud-ring/Investors reacted quickly. ZTE shares fell sharply in Hong Kong and hit their daily limit in Shenzhen trading. The selloff reflected concern over the financial impact of another major U.S. enforcement action. In a filing with the Hong Kong stock exchange, the company said it remains in “ongoing communication” with the U.S. Justice Department. ZTE also said it continues to strengthen its compliance framework and maintains a zero-tolerance stance on corruption.
A familiar pattern for U.S. regulators
The case follows a common pattern in foreign bribery enforcement. Authorities often uncover misconduct years after it allegedly occurred. In ZTE’s case, investigators view 2018 as the most recent point of concern, though earlier deals remain under review. Prosecutors are considering different paths, including potential criminal charges or a negotiated resolution that avoids a lengthy court fight.
Any settlement would need approval from Beijing, which adds a diplomatic layer to the process. A spokesperson for China’s embassy in Washington said they were not aware of the details of the case. However, the spokesperson stressed that Chinese companies must follow local laws when operating abroad.
ZTE’s past dealings with U.S. regulators complicate the talks. During President Donald Trump’s first term, the company paid about $2 billion in penalties over illegal exports to Iran. At one stage, U.S. authorities cut off ZTE’s access to American technology. That move forced the company to halt major operations. The ban was later lifted after ZTE paid an additional $1 billion and accepted a revised compliance agreement, which remains in force today.
If current negotiations fail, ZTE could again face severe consequences. U.S. officials could restrict American suppliers from doing business with the company. Such a move would threaten access to key components from firms like Qualcomm. Although ZTE reported profits of just over $1.1 billion last year, another large penalty would strain its finances.
The investigation also reflects a broader U.S. push against corruption in the global telecom sector. In recent years, authorities have pursued cases involving companies based in Europe, Russia, and Latin America. ZTE has previously appeared in corruption allegations spanning nearly 20 countries. Past reviews described repeated payments to public officials to secure contracts.
As talks continue, the outcome will signal how aggressively the United States intends to pursue repeat corporate offenders. For investors and compliance watchers, the message is clear. Alleged misconduct does not fade with time, and unresolved issues can return with heavy financial and reputational costs.