ZTE

Sources: ZTE's U.S. ban to be lifted soon, preliminary agreement signed (UPDATE)

Sources: ZTE's U.S. ban to be lifted soon, preliminary agreement signed (UPDATE)
UPDATE: After Reuters reported that ZTE has signed a preliminary agreement with the U.S. Commerce Department, a spokesperson said in an official statement for Politico that "no definitive agreement has been signed by both parties" and that there are no other updates at this time. It appears that the Trump administration is pretty bothered by the fact that ZTE wanted to replace a top executive with one from another company that was also sanctioned by the U.S. government for being a national security threat.

The ZTE saga is close to an end, as sources with knowledge about the subject claim the Chinese company has already signed a preliminary agreement with the United States government, which supposedly allows it to continue to buy components, parts, hardware and software from the U.S. under certain conditions.

Reuters reports U.S Commerce Department ban on ZTE is likely to be lifted although “no definitive agreement has been signed by both parties” just yet. Sources say the preliminary deal includes a $1 billion fine against the Chinese company and an additional $400 million in escrow in the event of future violations.

Moreover, the U.S. Commerce Department is expected to count the $361 million ZTE paid last year as part of a settlement agreement, which will allow the government to claim no less than $1.7 billion in penalties.

The preliminary agreement was signed by ZTE over the weekend, but the Chinese company has yet to sign the amended settlement agreement. Besides having to pay a huge fine, ZTE must also allow unrestricted visits meant to verify that US components are being used as claimed by the company.

As reported earlier, ZTE must also replace its board and executive team in 30 days from the moment the agreement was signed. Also, all calculations of the US components in ZTE products must be posted on the company's website.

source: Reuters, Politico

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8 Comments

1. maherk

Posts: 6879; Member since: Feb 10, 2012

MCGA!

2. Dr.Phil

Posts: 2376; Member since: Feb 14, 2011

Actually, ZTE uses about 30% of components that are made in the United States. So, by ZTE going almost bankrupt, it ends up hurting U.S. technology firms and manufacturers such as Qualcomm and Broadcom. Qualcomm was going to lose $500 million in revenue from not being able to have ZTE as a customer. Another U.S. firm called Acacia Communications that created fiber optic components was going to lose 30% of it's revenue for ZTE being banned. It's not just China that stands to gain or lose from this.

8. maherk

Posts: 6879; Member since: Feb 10, 2012

I'm saying that based on Trump's tweet, where he sounded more concerned about the jobs lost in China because of these sanctions on ZTE.

3. Arthurhkt

Posts: 723; Member since: Apr 19, 2012

I am much more concern for the employee than the company, by temporary closing their business, ZTE need to survive by cutting either cutting cost or fired some employee, indirectly this would effect people all around the world that working under ZTE loosing their job as well.

4. tedkord

Posts: 17357; Member since: Jun 17, 2009

You just gotta know who to bribe. Its Trump. That's who you bribe.

6. bucknassty

Posts: 1345; Member since: Mar 24, 2017

Axon 9!!!!!!! BRING THE HEAT!

* Some comments have been hidden, because they don't meet the discussions rules.

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