The Battle Is Over, US Govt Lifts ZTE Trade Ban
ZTE is breathing a sigh of relief after signing a deal with the US government overnight removing the trade ban which halted operations for close to three months.
The trade ban was set in place for seven-years with the Chinese company working to abolish it.
The ban will be removed once ZTE deposits US$400 million in an escrow account, according to the US Commerce Department. The escrow agreement is a part of the US$1.4bn fine placed on the company.
A representative for the US Commerce Department says, “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 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.”
Earlier this month, the US Commerce Department gave the Chinese manufacturer a temporary permit to resume certain business activities including the ability to update its phones and other equipment.
ZTE recently changed its senior management – as per one of the US government’s stipulations – appointing a new CEO, CFO and two vice presidents.
US President Donald Trump originally lifted the trade ban in late May with the company given a number of provisions including paying a US$1.4bn fine, removal of senior management and letting US officials monitor the company’s actions for the next decade.
The US Senate quickly overturned the decision with a 80-10 to reinstate the ban, a week later.
This ban was put in place after ZTE pleaded guilty to selling and buying good from Iran, a country under US sanctions.
The trade ban impacted ZTE’s operations on home soil with Telstra dumping the company as its home-brand phone provider.