"ZTE has also been replacing some of its top executives in a bid to make good on its pledge".
The United States and China have reached a deal that allows the Chinese telecommunications giant ZTE Corp.to stay in business in exchange for paying an additional $1 billion in fines and agreeing to let USA regulators monitor its operations.
The department said the deal includes a $1 billion penalty against ZTE and a USA -chosen compliance team. Also extraordinary, and indicative of its desperation, is its decision to sign off on the USA demand to embed a compliance team within the organization, which can possibly compromise its commercial, business and technology secrets. "This should serve as a very good deterrent not only for them but for other potential bad actors", Ross said.
In April, the US Department of Commerce issued an order barring US companies from selling software or hardware to ZTE for seven years, after the company violated US sanctions by working with Iran and North Korea. ZTE paid $1.19 billion in fines for those violations, but the dispute didn't end there.
New deal: Wilbur Ross, the United States commerce secretary, told CNBC that the agreement calls for ZTE to pay a $1 billion fine for violating trade agreements by dealing with Iran and North Korea. Finally, ZTE will have to place an additional $400 million in escrow for the next 10 years.
"The total deal is $1.4 billion".
"We'd still retain the power to shut them them down again", he added.
Strict though it may be, the settlement is welcome news in China.
"Today, BIS is imposing the largest penalty it has ever levied and requiring that ZTE adopt unprecedented compliance measures", said Secretary of Commerce Wilbur Ross. Thanks to the White House, specifically the President Trump, for allowing ZTE to clean up its act.
Trudeau rejects immediate retaliation on US steel and aluminum tariffs
Morneau has said Ottawa is buying the project from Kinder Morgan Canada in order to help the expansion overcome political risks. Trump has long railed against NAFTA, condemning it as a job-killing "disaster" that has decimated USA manufacturing.
There are also some political ramifications to this deal - which are outside the scope of AnandTech's purview - but as the New York Times notes, many see this as part of a larger peace offering in ensuring a new trade deal between the U.S. and China.
"We executed a definitive agreement with ZTE", Ross told CNBC Thursday.
The immediate ramifications of this deal are that although ZTE is becoming cash-poorer, this will allow them to resume day-to-day business operations and get the business moving again.
Treasury Secretary Steven Mnuchin has said that the enforcement of the ban wasn't meant to put the company out of business, and that any changes being considered would support us national security.
ZTE's survival has been a topic of discussion in high-level U.S.
It is China's second largest telecoms manufacturer and depends on US-made components for the production of handsets.
It idled factories and halted trading of its stock on Chinese exchanges.
Whatever the case, as long as ZTE can keep its nose clean and adhere to the terms of this newest deal with the US government, it will be able to solider on as China's second-largest smartphone OEM.
As trade tensions have mounted, ZTE has become something of a sore point in those talks.