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Chinese tech giant may have gone against trade agreements with the U.S.

A warning issued to President Trump’s key cabinet members on Wednesday by two senior U.S. lawmakers bore no good news. The two lawmakers, known for their outright opposition to China’s telecommunications giant ZTE, raised some concerns. They claimed that ZTE’s business in Venezuela might be contrary to an agreement it previously struck with the U.S. government.

Commerce Secretary Wilbur Ross and Treasury Secretary Steven Mnuchin, Republican Senator Marco Rubio and Democratic Senator Chris Van Hollen wrote a letter to Secretary of State Mike Pompeo. The letter cited a Reuters report about ZTE’S provision of a population database for Venezuela’s government.

According to the Reuter’s report, the database enabled the Venezuelan government to monitor its citizens. This is through video surveillance and other methods. The report also claimed that the database contained components manufactured by U.S. IT infrastructure company, Dell Technologies.

“ZTE installed data storage units built by Dell Technologies,” the letter stated. “Though Dell’s transactions appear 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-user.”

The November 14 Reuters cited that the Venezuelan government contracted ZTE to build a database. The company was also hired to develop a mobile payment system for a smart ID. ZTE reportedly entrenched its employees in CANTV, a unit of Venezuela’s state telecommunications firm, during the development process. The precedent of which, however, is subject to U.S. sanctions.

The U.S. government has in place financial sector sanctions aimed at denying President Nicolas Maduro’s regime a critical source of financing. Maduro’s administration relies on the source of funding to maintain its rule. The financial sanctions also protect the U.S. from complicity in Venezuela’s corruption and pauperization of the Venezuelans.

Van Hollen and Rubio are adamant in pushing efforts by U.S. lawmakers to maintain the sanctions on ZTE. Both Senators’ co-sponsored legislation introduced in September would reinforce a crippling ban imposed by the Commerce Department on ZTE. This applies should ZTE violate terms of the deal it struck with Trump administration.

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