China's second largest telecom equipment maker (after Huawei) has reportedly signed an agreement that would lift the U.S. Commerce Department's ban. He went on to say that ZTE would pay a $1 billion fine, as well as $400 million in escrow to cover "any future violations".
The U.S. blocked ZTE's access to U.S. suppliers in April, saying the company violated a 2017 sanctions settlement related to trading with Iran and North Korea and then lied about the violations.
In mid-April, the United States Department of Commerce slapped ZTE with a Denial Order over an issue it had with USA sanctions in 2017.
ZTE would still have to pay the US government up to $1.7 billion in fines as part of this new settlement, according to the report.
As part of the deal, ZTE must also allow unfettered site visits to verify that USA components are being used as claimed by the company, post calculations of the United States components in its products on a public website, and replace its board and executive team in 30 days, sources said. The agreement is also expected to call for other concessions from ZTE, including new board members and increased USA oversight of its business.
ZTE will be forced to pay a $1 billion fine, make changes to its executive team, and allow a USA compliance team to oversee activities. "ZTE has also been replacing some of its top executives in a bid to make good on its pledge".
Amidst the white-hot trade tension brewing between the worlds two most powerful superpowers, U.S. President Donald Trump surprisingly announced his intention to help the beleaguered Chinese company which we covered here last month.
A new report claims ZTE has signed a preliminary agreement with the USA government that would allow it to once again use parts from US phone suppliers. Senate Minority Leader Chuck Schumer told Reuters he thought Congress should immediately take action to try to block the deal. It has a small but rising share of the smartphone business in the US.