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

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

According to Ross, ZTE will pay a US$1 billion fine to the USA government, on top of the US$1.2 billion the Chinese company paid in penalties in March, when it admitted exports to Iran and North Korea despite global trade sanctions.

US Commerce Secretary Wilbur Ross, who is now in Beijing for trade talks with China and told CNBC that a deal worth $1.4 billion had been struck.

ZTE's survival has been a topic of discussion in high-level US-China trade talks.

ZTE ceased major operations in April after a seven-year ban was imposed on the company for breaking a 2017 agreement that was reached after it was caught illegally shipping goods to Iran and North Korea.

Recently, ZTE has signed a preliminary agreement that would lift the ZTE ban imposed by the US Department of Commerce that prevented US companies from buying electronic components from Chinese suppliers.

"The total deal is $1.4 billion". The company already has a US court-appointed monitor.

But early this year, the United States government discovered that ZTE had not followed through on its promise. Their jobs were in jeopardy after ZTE lost access to USA technology and suspended most of its operations.

The deal will involve ZTE paying a $1bn penalty and hiring a compliance team chosen by the US.

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Chinese telecoms company ZTE will likely continue to exist, thanks to a deal brokered between it and the U.S. government today. ZTE will also provide access to a team for a period of 10 years to monitor the company's compliance with US export control laws. That penalty was assessed following an investigation showing that ZTE had violated USA sanctions and had provided technology to Iran and North Korea.

The new agreement also requires ZTE to replace its board of directors and senior leadership.

ZTE has pledged to overhaul its flawed management and internal culture after striking a deal with the USA to get back in business after a damaging two-month hiatus.

Earlier, Wilbur Ross stated that the U.S. was looking at alternatives to the debilitating sanctions threatening the survival of ZTE.

"Even China's State-owned Assets Supervision and Administration Commission had harsh words for ZTE, saying that the company was "stupid and passive" and that "[ZTE had] taken risks to engage in illegal operations numerous times".

Since the decision came into force last month, President Donald Trump has appeared to open the door on a compromise after announcing on Twitter that he would help the group "get back into business".

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

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