U.S. agrees to lift ban on ZTE after signing escrow agreement
ZTE is very close to being able to continue to do business in the United States after months of negotiations with the government. Although the Chinese company will be the subject of draconian measures from the Commerce Department, ZTE is willing to meet all demands just to be able to be present on the U.S. market.
A new report by Bloomberg states that ZTE has taken another important step toward lifting the U.S. ban on the Chinese company doing business with local suppliers. Apparently, ZTE has just signed an escrow agreement with the Commerce Department, which will allow the company to once again buy components from American suppliers if they deposit $400 million in escrow.
Although ZTE is already operating in the United States on a temporary waiver until August 1, the ban could be lifted as early as tomorrow when the escrow payment is expected to be completed.
The escrow agreement is the last step that the Commerce Department imposed on the Chinese company before lifting the ban after ZTE sacked all members of its board in the U.S. last month.
Once the monitor is selected and brought on board, the three-pronged compliance regime, the new 10-year suspended denial order, the $400 million escrow, and the monitor, will be in place. The ZTE settlement represents the toughest penalty and strictest compliance regime the Department has ever imposed in such a case. It will deter future bad actors and ensure the Department is able to protect the United States from those that would do us harm.
The escrow agreement is the last step that the Commerce Department imposed on the Chinese company before lifting the ban after ZTE sacked all members of its board in the U.S. last month.
source: Bloomberg
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