The company is reportedly agreeing to fines in order to lower trade restrictions.
The Chinese manufacturer ZTE ran afoul of the U.S. Commerce Department after violating trade sanctions with Iran and North Korea. The company was fined and agreed to take action against offending employees, which it failed to do. After the failure of the agreed upon terms, the Commerce Department invoked a 7 year ban on American companies doing business with ZTE.
With this ban, ZTE essentially stopped all operations, which did not bode well for anyone as the U.S. and China were, and still are, in the middle of high level trade negotiations. The loss of such a large Chinese company, and the many jobs that would go with it, would surely prove to be a roadblock for further negotiations. U.S. President Donald Trump tweeted out that he wanted the Commerce Department to find a solution for the Chinese phone company.
Reuters is reporting that the solution may have been found. Reuters reports that the company has signed an agreement that would result in the U.S. lifting the 7 year ban. The agreement would result in a $1 billion fine against the company, as well as $400 million to be placed in escrow to cover any future violations. In addition, the Commerce Department would amend the 2017 settlement and would bring the total fine for ZTE could be as much as $1.7 billion. As part of the deal which would save China’s number two phone manufacture, the company would replace it’s board and executive team within 30 days, and allow unfettered site visits to ensure that U.S. components are being used as claimed.
A Commerce Department spokesman stated that ““no definitive agreement has been signed by both parties.”