Quarterly CECO Newsletter to Business Partners – Q2 2021

Dear Valued Business Partner:
尊敬的业务合作伙伴：

At ZTE, we understand that export compliance benefits both our company and our business partners. This update describes some of our efforts in Q2 2021 to ensure export control compliance and to maintain strong relationships with our business partners.
中兴通讯了解出口合规能够让我们和我们的业务合作伙伴达到双赢。本篇通讯稿介绍了我们在2021年第二季度为确保出口管制合规以及为维护与业务合作伙伴稳固关系而作出的努力。

Track policy changes in a timely manner to efficiently support business development: In this quarter, ZTE closely tracked and analyzed the US export control and economic sanctions against Myanmar, the Internal Compliance Mechanism for Export Control by Exporters of Dual-use Items, and US release of Non-SDN Chinese Military-Industrial Complex Companies List and other changes in the laws and regulations on export control and economic sanctions. Besides, ZTE has efficiently contributed to the adjustment of the business compliance guidelines, strictly regulated the business process, ensuring that ZTE's business can be carried out in compliance and compliance risks could be lowered resultfully.
及时追踪政策变动以高效支撑业务开展：本季度，公司紧密追踪和分析包括美国对缅甸的出口管制与经济制裁、中国两用物项出口管制内部合规指南、美国发布中国军工复合体企业清单等出口管制和经济制裁法律法规变动，高效推进公司业务合规指引调整，严格规范业务流程，确保我司业务能够合规开展，有效降低了合规风险。

New achievements in the construction of compliance manuals: The construction of compliance manuals is an important step of an effective compliance system. ZTE is committed to continuously enhancing compliance manuals. Among those great progress on ZTE’s export compliance manuals in this quarter, we have released the Export Control Compliance Dept. manual, and completed the manual development empowerment training for several subsidiaries. Three pilot subsidiaries’ self-compiled manuals have been certified and are going to be released later. In addition, the manual practice community has been established and preliminarily run by the manual project team, which makes the manual element and other compliance elements or compliance fields interact well.
合规手册建设不断取得新成果：合规手册建设是有效的合规体系建设的重要一环，中兴通讯一直致力于不断完善合规手册。本季度，我司的出口合规手册建设也取得了较大进展，发布了出口管制合规部分册，完成了多家子公司的手册开发赋能培训，三家手册自主编写试点子公司的手册已通过了认证并达到了可发布状态。手册项目组搭建的手册实践社区已创建并初步运行，实现了手册要素与其他合规要素和合规领域的互动。

Continuous promotion on export authorization control: ZTE has been continuously carrying out ECCN classification expert training and certification, established a three-level ECCN classification expert team to improve the professional level of ECCN classification through human resource construction, and deployed and implemented ECSS in the subsidiaries smoothly. At the same time, the risk assessment and compliance inspections on the subsidiaries’ ECCN publication have been completed, which could help the subsidiaries to identify weak points and propose improvement suggestions from the aspects of organization, process specifications, system management and control, business operation results and training implementation verification, so as to continuously improve the ECCN publication ability and meet the requirements of ECCN publication. In addition, the GTS implementation team continuously promoted the optimization of screening tools to screen addresses in English, and standardized the management of compliance screening data through the data monitoring platform, to continuously improve the integrity and accuracy of compliance screening. The company's automatic compliance management and control capabilities were effectively improved.
不断推进出口授权管控：中兴通讯持续开展ECCN分类专家培训与认证工作，建立了三级ECCN分类专家团队，通过人力建设提升ECCN分类的专业水平。同时，顺利开展ECSS在子公司的部署实施工作。同时完成了对子公司ECCN上网发布工作的风险评估与合规检查，该访谈与检查会帮助子公司从组织、流程规范、系统管控、业务操作结果及培训实施效果验证等多方面识别弱项并提出改进建议，以持续提升子公司ECCN上网发布能力，满足ECCN上网发布要求。此外，GTS实施团队持续推动扫描工具的优化，实现了对英文地址的扫描，并通过数据监控平台规范管理合规扫描数据，不断提升合规扫描的完整性和准确性，公司自动化合规管控能力得到有效提升。

Comprehensive risk assessment: In this quarter, the ECP (Export Compliance Program) risk assessment project of ZTE has continued to carry out a comprehensive risk assessment work in key business fields such as R&D, supply chain and engineering services, under the combination of both the guiding principles in the Corporate-Level Manual and the BU-Level Manuals and the 2020 risk assessment pilot experienced. It uses the questionnaire to collect the relevant information of each business unit, and then identifies the inherent risks in the business activities of each priority department through multiple methods, and verifies the integrity and effectiveness of compliance control. Next, based on the differentiated risks and the corresponding risk levels of each business unit, the company will formulate management and control measures to invest resources efficiently and achieve hierarchical compliance management.
实施全面的风险评估工作：本季度，公司ECP(Export Compliance Program)风险评估项目继续以合规手册总册及分册中的指导性原则为基础，结合2020年风评试点经验，在研发、供应链、工程服务等重要业务领域全面开展风险评估工作。使用问卷收集各业务单位相关信息，筛选出不同优先等级的部门，再通过多种方法识别各优先级的部门经营活动中的固有风险并验证合规管控的完整性和有效性。接下来，公司将根据各业务单位的差异化风险及相应风险等级制定管控措施，高效投入资源，实现合规的分级化管理。

Carry out external compliance communication actively: ZTE actively conducts experience exchanges of compliance research and compliance system construction with industry partners, renowned scholars, and enterprise research institutes, draws on useful experience and disseminates the methodology of advanced compliance system construction. Nowadays, ZTE's compliance brand is gradually recognized by many parties in the industry. In addition, the company's compliance exchanges with domestic and overseas key customers and partners are also progressing steadily. In the first half of 2021, the company has conducted nearly twenty compliance exchanges. Through external communication and experience sharing, the company’s customers and partners has further gained faith from ZTE, and strengthened their confidence in ZTE’s robust development.
积极开展对外合规交流：中兴通讯积极与行业伙伴、知名学者、企业研究院开展合规研究与合规体系建设经验交流，借鉴有益经验，对外传播先进合规体系建设方法论，中兴通讯合规品牌逐渐受到业界多方认可。此外，公司与国内外重要客户及合作伙伴的合规交流也在稳步推进，上半年已累计开展近二十次合规交流。通过对外展示与经验介绍，公司与客户及合作伙伴间的合规增信工作进一步深化，强化了客户与合作伙伴对公司稳健发展的信心。

                                                                                          Lawrence koh
                                                                                          许绍勤

                                                                                         
                                                                                          Chief Export Control Compliance Officer 

                                                                                          首席出口管制合规官
                                                                                          ZTE Corporation
                                                                                          中兴通讯股份有限公司
                                                                                          Lawrence.koh@zte.com.cn
                                                                                         +65 84999511 (Singapore/新加坡)
                                                                                         +86 15768250208 (China/中国)