The US government has agreed a deal with Chinese smartphone and telecommunications network equipment manufacturer ZTE that will allow it to continue to trade with American firms.
The Department of Commerce notes this is the largest penalty it has ever levied on a single company. "If they commit any further violations, we would again be able to deny them access to United States technology as well as collect the additional US$400 million in escrow".
"We will closely monitor ZTE's behavior", said Ross in the release.
The story began last March when ZTE lied to the US government about disciplining employees responsible for supplying, building, and operating telecommunications networks in Iran with USA -supplied components and equipment. The order effectively cut off the company off from receiving most USA technology, and as a result of this ban, ZTE's operations, which heavily relied on importing both hardware and software from the USA, ground to a halt, putting the future of the company in doubt. China has vowed to retaliate on everything from US soybeans to airplanes, and said it will abandon its commitments if the USA follows through on its tariff threat.
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The penalties are in addition to the $892 million in penalties ZTE already paid. The company announced it was shutting down just weeks after the ban was announced. "They will pay for those people, but the people will report to the new chairman, because we are also having them replace the entire management and the entire board".
"We are literally embedding a compliance department of our choosing into the company to monitor it going forward". Ross had been instructed to look into easing restrictions on ZTE by President Trump, who had received a personal request from Chinese President Xi Jinping. The U.S.is maintaining its 10-year export ban on ZTE, but the ban is indefinitely suspended and is likely to remain suspended if ZTE complies with the U.S. trade laws. According to Trump administration officials, ZTE gave numerous wayward executives their full 2016 bonuses and then lied about it to the U.S. government.
In April, Washington banned the sale of crucial USA components to the company after finding it had repeatedly lied and failed to take action against workers responsible for the sanctions violations. This compromise would allow the company to once again use USA -made components in their products-although at a large cost.
Shares of Acacia and Oclaro extended their gains on Tuesday in heavy trading after news of the preliminary deal, ending up 1.7 percent and 1.8 percent, respectively. 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.