ZTE settles US Commerce Department sanctions case, to pay US$1 billion

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

Under the new agreement, ZTE must also retain a compliance team selected by the Commerce Department for 10 years.

Amidst the white-hot trade tension brewing between the worlds two most powerful superpowers, U.S. President Donald Trump surprisingly announced his intention to help the beleaguered Chinese company which we covered here last month. ZTE relies on USA parts and the ban also hurt ZTE's us suppliers.

Sources say the preliminary deal includes a $1 billion fine against the Chinese company and an additional $400 million in escrow in the event of future violations. It isn't clear what he will get in return for allowing ZTE to remain in business.

Senate Majority Leader Charles E. Schumer called for Congress to reverse the decision, which is unlikely.

Still, the resolution of the ZTE case may clear the way for the United States to make progress in its trade talks with China. The Pentagon earlier this month ordered retail outlets on US military bases to remove from the shelves smartphones made by the two companies.

ZTE also did not immediately respond to requests for comment. The U.S. threatened sanctions, but ZTE promised to change its practices and punish the executives responsible for its misconduct. It agreed to pay $890 million in fines, dismiss four employees, and discipline 35 others by either denying them their bonuses or reprimanding them. Post calculations of United States parts in the company's products would also have to be on a public website.

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Mr. Trump appears to be using ZTE's punishment as a bargaining chip in negotiations with China, rather than a matter of law enforcement.

Finally, while no agreement has been officially inked, the sources in the Reuters article did say ZTE has finished all of its signatures and that the us just needs to finalize the deal. The gear maker pleaded guilty past year in federal court in Texas for conspiring to violate US sanctions to Iran.

ZTE's survival has been a topic of discussion in high-level U.S.

A sign of ZTE Corp is pictured at its service centre in Hangzhou, Zhejiang province, China May 14, 2018.

Thursday's agreement was "a prerequisite for making broader progress", DeBusk said. "So this change is appropriate to bring the punishment back in line with what was originally intended", as USA official told Breitbart News.

Shares of Qualcomm Inc rose as much as 4.7 percent while NXP jumped as much as 6.7 percent. Smaller makers of optical components, including Oclaro and Acacia, rely more heavily on ZTE's business.

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