ZTE will reportedly pay over $1 billion to lift U.S. ban

ZTE will reportedly pay over $1 billion to lift U.S. ban

According to Reuters, the preliminary deal includes a $1 billion fine against ZTE plus $400 million in escrow for any future violations, sources said.

Ross said the USA will install its "own compliance people" to monitor the company and shareholders will bring in new management and board.

Commerce Secretary Wilbur Ross says the US has struck a deal with Chinese telecom giant ZTE to end crippling American sanctions.

The ban, which traces back to a breach of the USA embargo on trade with Iran, had prevented China's second largest telecoms equipment maker by revenue from buying the us components it relies on to make phones and other devices.

The trouble with ZTE goes back to previous year when the company admitted to selling US technology to Iran and North Korea in violation of economic sanctions.

China-based ZTE has reportedly signed an agreement in principle that would lift a U.S. Commerce Department ban on the company which barred it from buying from U.S. suppliers.

Under the deal, the ban is suspended for 10 years and can be activated by Commerce should the company commit additional violations during that decade-long "probationary period", the department said in a statement announcing the agreement.

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ZTE's survival has been a topic of discussion in high-level U.S. This would allow the USA to quickly re-instate the ban if ZTE violates the terms of the 10 year agreement. It also has to pay a $1 billion fine and hold another $400 million in escrow. The company shut down manufacturing and other major operations on May 10, idling most of its 75,000-strong workforce. Commerce Secretary Wilbur Ross said today that ZTE has agreed to pay the largest penalty ever levied by the department's Bureau of Industry and Security (BIS), and that the company will "adopt unprecedented compliance measures".

Ross said the agreement will serve as a "very strong deterrent, not only for them, but for other potential bad actors".

Now, though, Reuters is reporting that a deal has been negotiated that would allow ZTE to get back in business with the export ban behind them, but with some big changes.

ZTE plead guilty to conspiring to violate United States sanctions against Iran and North Korea in a U.S. court past year.

The Trump administration has walked a fine line, stressing that any ZTE deal is separate from ongoing trade negotiations with China.

This move was slammed by members of Congress from both parties, who said the President's tweet was irresponsible.

Earlier, Wilbur Ross stated that the U.S. was looking at alternatives to the debilitating sanctions threatening the survival of ZTE.

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