The Commerce Department said ZTE must also put $400 million in escrow - a sum it would forfeit if it violated Thursday's agreement. The U.S. Department of Commerce wishes to amend the settlement agreement so that the $361 million that the company had already paid would be included. Now ZTE has got to pay a $1 billion fine and submit to USA oversight. It was blocked from purchasing parts from USA companies, sanctions that had crippled the company.
As part of the agreement, ZTE has promised to replace its current board of directors and executive team within thirty days and will allow the company periodic inspections to verify that the locally manufactured components are being used as agreed. 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 reports out of China, ZTE has been making plans to resume manufacturing within hours from the official lift of the usa embargo, which deprived it of crucial us -made components including SoCs, radio chips, and software.
The new deal will also see ZTE paying $400m into a holding account to insure against future violations. Further fees could be assessed for a grand total as much as $1.7 billion.
According to a report from Reuters, ZTE has reached a deal with United States authorities that would lift a ban that prevents it from buying parts from usa suppliers. ZTE reached an agreement to turn over $1.19 billion and punish executives involved in the scheme, but in April the US determined that the company hadn't lived up to its promises. It agreed to pay $890 million in fines, dismiss four employees, and discipline 35 others by either denying them their bonuses or reprimanding them. The U.S. responded to this information with a denial order which made it illegal for U.S. companies to do business with ZTE.
Under this new agreement, ZTE will retain compliance contractor in addition to the three-year court-appointed monitor imposed by the plea agreement. For the U.S.to shut down one of China's largest companies is a very dramatic type of move.
Last month, President Trump ordered the Commerce Department to reconsider the company's punishment after what he said was a personal request from President Xi Jinping of China. For other USA companies, ZTE is a supplier. FBI Director Chris Wray said the proliferation of ZTE phones in the USA provides "the capacity to maliciously modify or steal information".