ZTE Signs Preliminary Agreement With Commerce Department To Lift US Ban

ZTE has been banned from purchasing sensitive technology from the US over its illegal sales to Iran and North Korea

Report Tentative ZTE Deal with U.S. Could Bring Fine to $1.7B AFP 5 Jun 2018Washington DC

In April, the Commerce Department barred ZTE from buying American components for seven years, after concluding that it deceived USA regulators after it settled charges last year of sanctions violations.

"If ZTE were to close down, I have every belief that their assets would then be absorbed by Huawei which is another giant telecommunication company".

"We urge you not to compromise lawful USA enforcement actions against serial and pre-meditated violators of USA law, such as ZTE", the senators wrote to key Trump cabinet members. That arrangement took experts on Chinese business by surprise, and some questioned how it could work. "China technology and trade", said Samm Sacks, a senior fellow in the Center for Strategic and International Studies' technology program. The Chinese government has delayed the deal as trade frictions intensified. And he said he believes the United States may drop the provision altogether rather than get locked in a prolonged battle over it.

That provision would not have had an impact on the already-lifted prohibition on US export sales to ZTE.

In return, Washington will strike the company from a sanctions list. An outside compliance team is already working with ZTE as part of the precious trade enforcement deal. If ZTE violates the terms, it will forfeit the money, and the ban will resume. Ross had been instructed to look into easing restrictions on ZTE by President Trump, who had received a personal request from Chinese President Xi Jinping.

The deal stipulates that ZTE will overhaul its board of directors and executive team in 30 days.

"Having a foreign compliance officer is definitely news", she said. Senator Marco Rubio (R-FL) has floated a proposal for Congress to block this sort of deal.

Senate Democratic Leader Chuck Schumer tweeted the "deal with ZTE proves the president just shoots blanks".

"ZTE has flagrantly and repeatedly violated USA laws", Van Hollen said in a statement.

"It doesn't really move the ball forward on the deeper structural issues in U.S".

Back in April, as punishment for continued violations of a previous export ban settlement with the US, the US Department of Commerce's Bureau of Industry and Security enacted a denial order against ZTE.

"Prior administrations have been real patsies for the Chinese and for other countries".

"How can the United States convince China that a trade agreement with them is of value, rather than a waste of paper that the Americans can scrap unilaterally?" US officials reached a deal on June 7, 2018, to ease sanctions that threatened to cripple Chinese smartphone maker ZTE, Ross said.

Trump has threatened to slap tariffs on at least $50 billion in Chinese imports shortly after publishing a final list of targets on June 15.

"At about 6:00 A.M. this morning, we executed a definitive agreement with ZTE and that brings, that brings to a conclusion this phase of the developing with them", Ross said in an interview with CNBC. The first settlement with ZTE set a record for civil and criminal penalties in an export control case.

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