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Agreement in principle to put Chinese firm back in business
10 June 2018, 03:16 | Austin Hogan
Report Tentative ZTE Deal with U.S. Could Bring Fine to $1.7B AFP 5 Jun 2018Washington DC
Finally, while no agreement has been officially inked, the sources in the Reuters article did say ZTE has finished all of its signatures and that the usa just needs to finalize the deal. Democratic Sen. Chuck Schumer of NY immediately responded to today's announcement: "Despite his tough talk, this deal with ZTE proves the president just shoots blanks".
The fine comes on top of a roughly $1 billion penalty ZTE has already paid for having sold equipment to North Korea and Iran in violation of US sanctions.
"The sources requested anonymity because they were not authorized to publicly discuss the matter".
China's ZTE will pay a $1 billion penalty and will embed a USA -appointed compliance team, terms that are similar to those President Trump discussed last month when he revealed that Chinese leaders had asked him to look into the matter. When U.S. regulators found that the company had not complied with the terms of the agreement, they cut off ZTE from its U.S. parts suppliers, a move described as a "death sentence" by the company, which employs 70,000 people in China.
Most of the world first heard of the dispute over ZTE almost a month ago following a tweet by U.S. President Donald Trump. The corporation will also have to change its board of directors within 30 days, before the accusations of Washington that it violated the prohibition to export to Iran and the Democratic People's Republic of Korea. Last month, Trump tweeted that he was looking for a way for ZTE to "get back into business, fast" because there were "too many jobs in China lost" from ZTE's shutdown.
The ZTE agreement was reached after weeks of talks between US and Chinese officials.
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Ross said the US will install its "own compliance people" to monitor the company and shareholders will bring in new management and a board.
Regardless of those talks, the Trump administration is facing a deeply hostile reaction from Congress, where there is bipartisan opposition to the deal.
In April, Ross's department re-activated sanctions against ZTE, claiming that ZTE had been making false statements about measures the company had agreed to take against employees running a unit that was doing business with Iran in violation of sanctions. Shenzhen-based ZTE has a subsidiary in Richardson, Texas. 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. Any violation can let the United States reimpose sanctions. "ZTE misled the Department of Commerce".
ZTE, which employs around 75,000 people worldwide, buys key components from a range of USA companies, including chips from Qualcomm and Intel.
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