ZTE signs agreement with U.S. to lift ban
The months-long saga involving ZTE and its ban on buying components from U.S. companies appears to be coming to an end.
The U.S. Commerce Department has reached an agreement with ZTE and the ban on ZTE will be lifted as soon as ZTE deposits $400 million in escrow. A source has told Bloomberg that ZTE is expected to complete its escrow payment within a day.
“Once the monitor is selected and brought on board, the three-pronged compliance regime — the new 10-year suspended denial order, the $400 million escrow, and the monitor — will be in place,” the U.S. Commerce Department said. “The ZTE settlement represents the toughest penalty and strictest compliance regime the Department has ever imposed in such a case. It will deter future bad actors and ensure the Department is able to protect the United States from those that would do us harm.”
ZTE was banned from buying components from U.S. companies back in mid-April. The ban was put in place because ZTE had plead guilty to illegally shipping U.S. tech to Iran and promised to dismiss four employees and discipline 35 others, in addition to paying $890 million in fines. However, ZTE admitted that while it had dismissed the four senior employees, it did not discipline the other 35 workers.
After the ban was put in place, ZTE was forced to cease main business operations. President Trump said he was working with Chinese President Xi Jinping to get ZTE "back into business, fast," but the U.S. House and Senate ultimately voted to keep the ban in place. Things began to turn around for ZTE recently, though, as the U.S. said that the company could conduct business needed to maintain its existing networks and equipment in the U.S. until August 1st, and now it looks like the ban on ZTE will finally be lifted.
The past couple of months have been pretty rough for ZTE, and this ban had quite a negative effect on its business. It's estimated that the ban will result in at least $3 billion in total losses for ZTE. At least the company is still in business, though, and soon ZTE will get back to work on repairing that business after the months-long ban.