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US reaches deal with China's ZTE, says Wilbur Ross

US reaches deal with China's ZTE, says Wilbur Ross

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

Mr Ross said the fine was the largest penalty ever levied by Commerce's Bureau of Industry and Security and pledged to continue monitoring ZTE's behaviour. Last year, ZTE settled the case with the USA government, promising to pay $890 million in fines and punish dozens of ZTE executives who orchestrated the illicit technology sales.

That report said ZTE would have to pay a total of $1.7 billion in penalties, with a preliminary deal including a $1 billion fine and $400 million in escrow in case of future violations.

Under this new agreement, ZTE will retain compliance contractor in addition to the three-year court-appointed monitor imposed by the plea agreement. Secretary of Commerce Wilbur Ross announced this development in relation to ZTE's ban.

The immediate ramifications of this deal are that although ZTE is becoming cash-poorer, this will allow them to resume day-to-day business operations and get the business moving again.

In return, the U.S.is rescinding the seven-year ban on exporting components from us -based companies in its continuing operations (primarily, producing smartphones). Their function will be to monitor on a real-time basis ZTE's compliance with USA export control laws. The U.S. Department of Commerce wishes to amend the settlement agreement so that the $361 million that the company had already paid would be included. At the same time, it continued to ask the US government to lift the ban. The legislation would restore penalties on ZTE for violating US sanctions against Iran and North Korea and block USA government agencies from purchasing equipment or services from ZTE or its bigger Chinese rival, Huawei Technologies.

U.S. President Donald Trump met with his trade advisers on Tuesday to discuss China's offer to import an extra $70 billion of American goods over a year in hopes of defusing a potential trade war between the world's two largest economies. Apparently, a part of the reason is that ZTE wants to replace a top executive with one from another company which the United States considers a potential threat, so we'll have to wait and see where things go from here... For this "pattern of deception, false statements, and repeated violations", the US Commerce Department issued the ban in April. ZTE also exported similar material to North Korea.

ZTE's return to the US market is good news for several American companies. This includes once again being able to receive Qualcomm SoCs and the Android OS for their smartphones, along with the numerous components used in their networking gear.

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