US Suspends Tech Ban In Exchange For Record Fines & US Oversight

US Suspends Tech Ban In Exchange For Record Fines & US Oversight

ZTE will also be required to replace its management board within 30 days.

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

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

"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.

In April, Ross's department re-activated sanctions against ZTE, claiming that ZTE had been making false statements about measures the company had agreed to take against employees running a unit that was doing business with Iran in violation of sanctions. But why is the US government so concerned with what ZTE makes and sells? In exchange, ZTE would have to pay a total of $1.7 billion in penalties, according to the the report. Its R&D centers are in China, the U.S., Europe, Japan and Canada.

Reuters reported Tuesday that under the preliminary agreement, ZTE would pay a $1 billion fine in addition to another $400 million in an escrow in case it commits future sanctions violations.

It's been a really rough couple of months for ZTE, but according to new reports, the company's troubles may soon be over as it has apparently almost reached a deal with the United States government.

ZTE shut down its operations at the beginning of May following Commerce's decision to ban it from purchasing equipment from us companies.

That penalty was assessed following an investigation showing that ZTE had violated USA sanctions and had provided technology to Iran and North Korea. It paid $890 million in fines.

But early this year, the USA government discovered that ZTE had not followed through on its promise.

Chinese telecom giant ZTE said its major operations had ceased following last month's U.S. ban on American sales of critical technology to the company.

US chipmaker Qualcomm has been trying to buy NXP Semiconductors of the Netherlands, but given the company's global reach, the deal had to be approved by numerous countries' antitrust regulators, including China's.

Also as part of the deal, the company must allow audits of their sites so that it can be seen US components are being used as claimed.

A sign of ZTE Corp is pictured at its service centre in Hangzhou, Zhejiang province, China May 14, 2018. The leading theory is that allowing the company to continue operating was a precondition for China's participation is discussions for a larger trade deal.

A ZTE spokesman couldn't be reached for comment.

The Chinese Commerce Ministry said Thursday that some progress was made in talks that ended last weekend. Oclaro got 18% of its business from ZTE a year ago, while 30% of Acacia's total revenue was from ZTE. "Export control and sanctions laws should not be negotiable, because fidelity to the rule of law is a key part of what distinguishes the USA from a country like China that is ruled by a Communist dictatorship".

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