In its settlement with Washington, ZTE agreed to pay a $1 billion fine, allow a compliance team chosen by the United States to be embedded in the company and replace its executive team and board of directors.
Chairman Yin Yimin's letter also apologized to ZTE's 80,000 employees, according to the South China Morning Post. 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.
The company will also have to keep a team of "compliance coordinators" for the next 10 years, which will be selected by the DoC. "If they commit any further violations, we would again be able to deny them access to USA technology as well as collect the additional US$400 million in escrow". Commerce Secretary Wilbur Ross said today that ZTE has agreed to pay the largest penalty ever levied by the department's Bureau of Industry and Security (BIS), and that the company will "adopt unprecedented compliance measures".
ZTE, headquartered in the southern city of Shenzhen, declined to comment on the report.
Ross, speaking about the agreement on CNBC on Thursday, said he did not think the arrangement would have any effect on tariff talks with China. Their function will be to monitor on a real-time basis ZTE's compliance with US export control laws.
The May ban came after the government determined that ZTE violated terms of a 2017 settlement by failing to fire employees involved with illegally shipping United States equipment to Iran and North Korea.
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China-based ZTE has reportedly signed an agreement in principle that would lift a U.S. Commerce Department ban on the company which barred it from buying from U.S. suppliers.
The Chinese smartphone and telecom company ZTE will officially be allowed to do business in the USA again.
The ban forced ZTE, which relies on USA components, to halt operations and would have ended most of its business. For other USA companies, ZTE is a supplier. Separately, Qualcomm is trying to get Chinese approval for its pending $44 billion acquisition of NXP Semiconductors NV.
It wasn't exactly a blazing fast process, costing ZTE billions as the Chinese multinational telecommunications equipment and systems company essentially had to shut down operations for the better part of two months, but you can probably expect phones like the Android Go-powered Tempo Go to be back in stock soon enough.