Published: Thu, June 07, 2018
Money | By Bruce West

China's ZTE Reportedly Strikes Preliminary Deal To Lift U.S. Ban

China's ZTE Reportedly Strikes Preliminary Deal To Lift U.S. Ban

Since then, the company appears to have signed a preliminary agreement that would see them pay a larger fine and then have the ban lifted.

For those unaware, Shenzhen-based ZTE violated sanctions placed on both Iran and North Korea by the U.S.

U.S. President Donald Trump arrives for a welcoming ceremony in Beijing, China, November 9, 2017.

Given ZTE's reliance on US-made parts, the sanctions effectively crippled the company and forced major operations to cease.

An agreement in principle is not a final agreement but is a step toward it. Commerce Department spokesman James Rockas told Reuters that "no definitive agreement has been signed by both parties". The U.S. position has been that the fine is a law enforcement action, which should not be included in the discussions around trade.

Regardless of those talks, the Trump administration is facing a deeply hostile reaction from Congress, where there is bipartisan opposition to the deal.

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.

Under the deal, ZTE will change its board and management within 30 days, pay a $1 billion fine, put $400 million in escrow and retain a new USA -selected compliance team, Ross told CNBC. A fine was imposed on ZTE and the company promised to reprimand the employees responsible for the violations, yet they only fired 4 senior employees and failed to discipline the other 35 responsible. This comes on top of the $361 million ZTE had already paid under the original settlement.

The probe found that ZTE had conspired to evade USA embargoes by buying United States components, incorporating them into ZTE equipment and illegally shipping them to Iran. The visits would verify that ZTE is using US components as they have agreed. But it seems ZTE is definitely in a better position now than it was just a few weeks ago.

The suppliers include Qualcomm, Broadcom, and Intel Corp, as well as smaller optical component makers Acacia Communications Incand Oclaro.

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