ZTE settles US Commerce Department sanctions case, to pay US$1 billion

  • ZTE settles US Commerce Department sanctions case, to pay US$1 billion

ZTE settles US Commerce Department sanctions case, to pay US$1 billion

The team will monitor ZTE's adherence to us export control laws - an arrangement the department described as the most stringent requirements it has ever imposed. "If they commit any further violations, we would again be able to deny them access to U.S. technology as well as collect the additional $400 million in escrow".

The agreement includes a $1 billion penalty for ZTE and another $400 million in trust to cover future possible violations. But the first official announcement came this morning from U.S. Commerce Secretary Wilbur Ross.

A bipartisan group of Senators Thursday introduced legislation to unwind a deal the White House struck with Chinese telecom giant ZTE. It would also allow unfettered site visits to verify that USA components are being used as claimed by the company, and post calculations of US parts in its products on a public website, they added. Their function will be to monitor on a real-time basis ZTE's compliance with US export control laws.

ZTE has agreed to a $1 billion penalty, in addition to $892 million it has already paid in penalties.

The May ban came after the government determined that ZTE violated terms of its 2017 settlement by failing to fire employees involved with illegally shipping U.S. equipment to Iran and North Korea.

"We are literally embedding a compliance department of our choosing into the company to monitor it going forward".

ZTE, which sources up to 30 per cent of its components from the United States, paused its operations as a result and claimed its survival was at risk.

Still, the resolution of the ZTE case may clear the way for the U.S. to make progress in its trade talks with China. "ZTE has also been replacing some of its top executives in a bid to make good on its pledge".

He also warned that if the company is caught not complying to the letter of the new agreement, strict punishment will snap into place.

ZTE's resuscitation with USA help has met strong resistance in Congress, where both Democrats and Trump's fellow Republicans have accused him of bowing to pressure from Beijing to help a company that has been labeled a threat to US national security. The Pentagon earlier this month ordered retail outlets on US military bases to remove from the shelves smartphones made by the two companies.

In April, Washington prohibited ZTE from buying parts from USA companies, including Qualcomm, Corning and Google.

China last weekend reportedly offered to buy an additional $70 billion in USA goods to cut the trade deficit, moving toward meeting one of Trump's central demands on trade.