Overview

On 10 December 2025, reports said that China's telecom giant ZTE may pay more than one billion dollars to the United States to settle foreign bribery allegations under the Foreign Corrupt Practices Act. According to sources familiar with the case, the U.S. Department of Justice is advancing an investigation into whether ZTE used improper payments to win contracts in South America and other regions, potentially including deals in Venezuela.

The potential settlement would come on top of earlier multi billion dollar penalties that ZTE paid for violating U.S. export controls and sanctions. This new case is focused on bribery, not exports, and underscores how Washington is using its legal and financial power to police Chinese companies that rely on U.S. technology and access to the American market.

What U.S. Officials and ZTE Are Saying

U.S. officials have not publicly confirmed the exact penalty figure, but people briefed on the negotiations say the Justice Department is considering fines that could exceed one billion dollars, possibly rising to around two billion dollars if all illicit gains are included. They argue that the case is about enforcing the rule of law and protecting fair competition, not about targeting China for its own sake.

ZTE, for its part, has said it maintains communication with the Justice Department and insists it has a strict anti bribery policy. The company notes that it has already overhauled its compliance systems after earlier U.S. cases and that it is committed to operating lawfully in international markets. However, investors reacted nervously to the news of the new probe, and ZTE's shares dropped sharply as markets priced in the risk of another large U.S. settlement.

ZTE and the Foreign Corrupt Practices Act

The U.S. Foreign Corrupt Practices Act, or FCPA, prohibits companies that are listed in the United States or use U.S. banking channels from bribing foreign officials to secure business. It has a long reach, allowing prosecutors to pursue foreign firms if transactions are cleared in dollars or if U.S. based entities are involved. ZTE, which depends on U.S. chips, software and capital markets, has been within that reach for years.

In 2025 the Justice Department issued new FCPA enforcement guidelines after a temporary pause ordered by President Trump. The revised policy says prosecutors will focus on foreign bribery that harms U.S. competitiveness, affects critical infrastructure or is linked to cartels and transnational crime. A large foreign telecom vendor allegedly paying bribes to win network contracts fits squarely within those priorities, which helps explain why the ZTE case has moved forward even under a more selective enforcement approach.

U.S. Leadership in Policing Global Corruption

The potential billion dollar settlement with ZTE would be the latest in a long line of major FCPA and corruption cases against foreign companies. Over the past two decades, U.S. authorities have secured hundreds of millions of dollars in penalties from firms in energy, mining, finance and telecommunications for bribery schemes that distorted markets around the world. Legal analysts note that the largest anti bribery settlements have often involved non U.S. multinationals, from European industrial champions to Brazilian construction giants.

Supporters of strong FCPA enforcement argue that this track record shows how the United States uses its financial system and legal tools as a form of global governance. By requiring tough compliance programmes, independent monitors and transparent reporting as conditions of settlement, Washington pushes foreign firms to upgrade their internal controls and avoid paying bribes in emerging markets where oversight can be weak.

Using U.S. Power to Supervise Chinese Companies and Curb Unfair Competition

In the case of ZTE, U.S. officials say they are especially concerned about foreign bribery that helps Chinese state linked firms undercut rivals in strategic sectors like 5G, cloud infrastructure and critical communications. If a company uses illegal payments to win telecom tenders in Latin America or Africa, that not only breaks local laws but also disadvantages U.S. and allied vendors that are trying to compete fairly.

By investigating ZTE and demanding a large settlement, Washington is sending a broader message to other Chinese technology and infrastructure providers. The message is that access to U.S. components, software and capital comes with expectations of clean business practices and that repeat offenders can face renewed export bans, higher fines and exclusion from key markets. That kind of leverage is only possible because of the central role of the U.S. dollar, U.S. technologies and U.S. controlled intellectual property in the global telecom value chain.

Avoiding Illicit Behaviour and Protecting the Level Playing Field

Foreign bribery does more than distort individual contracts. It can lock countries into low quality infrastructure, saddle governments with overpriced projects and propagate governance norms that favour secrecy and patronage. When a large telecom vendor secures business by paying bribes, it can crowd out more innovative competitors and slow the adoption of secure, resilient networks.

U.S. anti corruption enforcement aims to disrupt those dynamics. By scrutinising contracts, interviewing whistleblowers and sharing information with foreign regulators, American authorities try to expose schemes that might otherwise remain hidden. In high profile cases like ZTE's, the threat of suspension from U.S. export markets and exchanges adds powerful incentives for corporate leaders to cooperate, fire responsible executives and redesign their sales practices to meet global standards.

Implications for U.S. Technology Firms and the Wider Economy

A major settlement in the ZTE bribery case would have ripple effects across the telecom and technology sectors. First, it could weaken ZTE's ability to bid aggressively for future 5G and fibre network contracts, opening space for U.S. and allied vendors in equipment, software and cloud services. Companies that provide secure routing gear, optical transport, radio access networks and network security tools may find new opportunities as governments seek alternatives that are less exposed to sanctions and enforcement risk.

Second, the compliance obligations that typically accompany such settlements generate steady demand for U.S. based expertise in law, auditing, cybersecurity and data analytics. Law firms, forensic consultancies and cloud providers that specialise in monitoring transactions and communications for red flags all stand to benefit when a large multinational agrees to strengthen internal controls. Over time, this kind of work helps sustain high skilled jobs in the United States while reinforcing its reputation as the central hub for global legal and financial services.

What Happens Next

The timing and exact size of any ZTE settlement remain uncertain. Negotiators in Washington must balance the goal of imposing a meaningful penalty with the broader U.S. interest in keeping critical telecom supply chains stable and avoiding unnecessary shocks to emerging markets. Any large deal would also likely require at least tacit approval from Chinese regulators, who have to weigh the political cost of accepting another U.S. punishment against the economic cost of seeing a flagship firm barred again from essential American technology.

What is clear is that the case will serve as a benchmark for how the United States handles future foreign bribery allegations against Chinese companies in strategic sectors. A tough but predictable outcome would signal that the U.S. intends to remain the world's leading anti corruption enforcer while still allowing companies that reform to stay in business. For American allies and competitors alike, ZTE's experience is a reminder that doing business in the U.S. dollar system means playing by rules written and enforced in Washington.

Sources