The US has reached an agreement to lift sanctions on Chinese telecom equipment maker ZTE, Commerce Secretary Wilbur Ross said Thursday. They'll have to pay a $1 billion fine, plus $400 million in escrow in case they do more shady sh*t.
ZTE was fined United States dollars 1.2 billion in March 2017, but in April, Washington banned the sale of crucial U.S. components to the firm after finding it had lied multiple times and failed to take action against employees responsible for sanctions violations.
The source also told FOX Business that ZTE will be on probation for 10 years and for 10 years the company will have to hire special compliance coordinators selected by and answerable to the U.S. Bureau of Industry and Security within the Commerce Department.
The parts ban looked like it was going to shut down ZTE once and for all, but a few weeks ago, the company got a new and unexpected ally in U.S. President Donald Trump.
The ban in effect nearly destroyed ZTE as it now relies on many components from American companies.
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At the weekend, the company is believed to have agreed to the plan although a "settlement" document has yet to be signed. It has enjoyed the backing of Chinese President Xi Jinping, who has been negotiating with Trump over a broader trade agreement.
The company will pay a $1 billion fine and agree to establish and pay for an in-house compliance team staffed by USA experts, Ross told CNBC. At that time, the USA discovered documents that showed how ZTE established new entities to sell US technologies to Iran. ZTE also needs to change its board and executive team in the next 30 days. "Congress should move in a bipartisan fashion to block this deal right away".
Sources told the outlet that ZTE signed a US "agreement in principle" over the weekend, but had not yet signed an amended version.
Also as part of the deal, the company must allow audits of their sites so that it can be seen US components are being used as claimed.