ZTE signs preliminary agreement to lift U.S. ban

ZTE signs preliminary agreement to lift U.S. ban

The deal will involve ZTE paying a $1bn penalty and hiring a compliance team chosen by the US, Mr Ross told CNBC. The Trump administration had previously announced that it was banning USA companies from selling ZTE components for seven years, components critical to its entire product line. When U.S. regulators found that ZTE had not complied with the terms of the agreement, they cut off the firm from its U.S. parts suppliers.

The settlement also requires ZTE to put US$400 million in escrow to cover any future violations and change its board of directors and executive team within a month.

The fine comes on top of a roughly $1 billion penalty ZTE has already paid for having sold equipment to North Korea and Iran in violation of USA sanctions.

The sanctions that the Trump administration had imposed on ZTE - and today's settlement - reflect those longer-term concerns and highlight not just the companies' dependence on the USA for advanced technology but also the attraction of their less expensive mobile phones for American consumers. The move will allow the company to get back into the business.

Before April 16, a settlement with Washington keeping the ban from going into effect had been in place since March 2017, after ZTE agreed to punish those responsible for covering up its sales to Iran and pay about two-thirds of a US$1.2 billion penalty.

Senate Democratic leader Chuck Schumer called the agreement "a 180-degree turn away from the president's promise to be tough on China".

ZTE's survival has been a topic of discussion in high-level US-China trade talks. These were chips and components made in America that ZTE uses to make its radio equipment.

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A ZTE spokesman couldn't be reached for comment. ZTE reached an agreement to turn over $1.19 billion and punish executives involved in the scheme, but in April the USA determined that the company hadn't lived up to its promises.

Fox News foreign policy analyst Kiron Skinner and Wall Street Journal editorial page writer Jillian Melchior on how the Trump administration reached a deal with Chinese company ZTE. Post calculations of United States parts in the company's products would also have to be on a public website.

But then in May, US president Trump had an apparent change of heart; despite election promises of prioritizing US jobs, Trump publicly anxious that ZTE's near-bankruptcy was causing there to be "too many jobs in China lost".

The terms, they said, were in line with Reuters reporting on the usa demands Friday. Specifically, Bloomberg reported that the US might lift the export ban if Chinese regulators approve Qualcomm's $43 billion bid for NXP. "It's unprecedented to have US agents as monitors ..."

"The hope is accommodating China's concerns on ZTE will open the door to favorable decisions on Qualcomm and other deals", said Altbach.

Thursday's agreement was "a prerequisite for making broader progress", DeBusk said.

ZTE supplier Oclaro Inc was up 1.3 percent while Acacia Communications Inc was down 0.6 percent.

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