Commerce Secretary: US Has Reached Agreement With China's ZTE

Commerce Secretary: US Has Reached Agreement With China's ZTE

Commerce Secretary: US Has Reached Agreement With China's ZTE

The United States and China have reached a deal that allows the Chinese telecommunications giant ZTE to stay in business in exchange for paying an additional $1bn in fines and agreeing to let U.S. regulators monitor its operations.

After the U.S. Department of Commerce banned ZTE from importing US-made components, due to the company violating an agreement it made in 2017, ZTE shut down most operations while it fought to lift the ban.

ZTE did not immediately respond to requests for comment on Thursday.

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 worldwide trade sanctions.

Total US penalties imposed on ZTE now amount to $2.3 billion, according to the Commerce Department.

The Commerce Department stated that ZTE had been put on the list for "falsely informing the U.S. Government that it would or had disciplined numerous employees responsible for the violations that led to" a previous agreement in March 2017, for the violation of USA trade agreements.

Since then, President Trump and his friends have stepped in to help ZTE stay alive, even though there is bipartisan agreement that the U.S. shouldn't.

While the details of last weekend's deal have yet to be revealed, it is understood that ZTE has promised to replace its board and executive team in 30 days.

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The US has struck a deal with Chinese telecom giant ZTE, resolving a controversy that had put the Chinese telecom giant in peril. According to Trump administration officials, ZTE gave numerous wayward executives their full 2016 bonuses and then lied about it to the United States government.

Ross said the USA will install its "own compliance people" to monitor the company and shareholders will bring in new management and a board. "Congress should move in a bipartisan fashion to block this deal right away".

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

Back in April, as punishment for continued violations of a previous export ban settlement with the US, the US Department of Commerce's Bureau of Industry and Security enacted a denial order against ZTE.

ZTE is based in Shenzhen, close to Hong Kong, and was founded in 1985. While it did fire the four employees, the company admitted to making false statements about the others, handing out full bonuses. The maintaining its 10-year export ban on ZTE, but the ban is indefinitely suspended and is likely to remain suspended if ZTE complies with the U.S. trade laws. "ZTE misled the Department of Commerce".

A US-appointed compliance team will monitor the arrangement, which if broken will see ZTE surrender the $400 million and be banned from the United States component market for ten years.

As part of a new agreement, the sources said, ZTE will retain another compliance contractor in addition to the three-year court-appointed monitor imposed by the plea agreement. This would allow the U.S. to quickly re-instate the ban if ZTE violates the terms of the 10 year agreement.

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