Published: Sat, June 09, 2018
Economy | By

U.S. Cuts Deal With Sanctioned Chinese Tech Company ZTE

U.S. Cuts Deal With Sanctioned Chinese Tech Company ZTE

It's been a really rough couple of months for ZTE, but according to new reports, the company's troubles may soon be over as it has apparently almost reached a deal with the United States government. "If they commit any further violations, we would again be able to deny them access to USA technology as well as collect the additional US$400 million in escrow". Should ZTE fail to comply with the deal, in addition to the billion dollar penalty, the agreement also includes $400 million in escrow to cover any future violations, including "sanctions or anything else", according to Ross. But the first official announcement came this morning from U.S. Commerce Secretary Wilbur Ross. Should the Chinese company break any of the USA export control laws during this period, the BIS can activate the suspended denial order which would, once again, disallow them from doing business with US companies in any capacity.

In return, the Commerce Department will lift the denial order banning ZTE from buying American products, which has crippled the company.

And last week, the Daily Beast reported that a day after the president said he wanted to help ZTE, the tech company hired the Mercury Public Affairs firm to lobby on its behalf in Washington.

Chinese smartphone maker ZTE has agreed to pay a $1 billion penalty to end crippling American sanctions, the US government announced on Thursday. Their function will be to monitor on a real-time basis ZTE's compliance with U.S. export control laws.

Whatever the case, as long as ZTE can keep its nose clean and adhere to the terms of this newest deal with the US government, it will be able to solider on as China's second-largest smartphone OEM. The White House didn't respond to a request for comment.

Trump later said his administration would allow the company to stay in business after paying a $1.3 billion fine, changing its management and board and providing "high-level security guarantees".

ZTE, which devised elaborate schemes to hide the illegal activity, agreed to plead guilty after the Commerce Department threatened to cut off its global supply chain. The Pentagon earlier this month ordered retail outlets on USA military bases to remove from the shelves smartphones made by the two companies.

According to the Hong Kong-based English-language daily, "The reprimand and forfeiture of bonuses were part of the original settlement that ZTE had reached with the USA government".

We're learning about a settlement that will cost ZTE $1.4 Billion. It has a small but rising share of the smartphone business in the US.

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