Tuesday, 19 June 2018 09:41

US senators reinstate ZTE ban in defence authorisation bill


The saga of Chinese telecommunications firm ZTE Corporation does not seem to be over yet, with the US Senate delivering a punch in the face to President Donald Trump with the passage of legislation that reinstates a seven-year ban on the company.

The Wall Street Journal reported that Trump was expected to try and get the ZTE sales ban stripped out of the final version of the bill. The House has already passed a version of the bill that does not contain the sales ban.

The US has a system whereby unrelated legislation can be tagged together before being voted on and the ZTE ban reinstatement was tagged on to the National Defence Authorisation Act, which specifies the yearly budget and expenditure of the Department of Defence.

ZTE agreed to a deal with the US Department of Commerce on 8 June, saying it would pay a fine of US$1 billion and and overhaul its management in order to lift a ban on doing business with American suppliers.

Apart from the fine, ZTE also agreed to place US$400 million in escrow against any future infringements.

The ban came about in April because the company had not adhered to part of an agreement it reached with the US after it was found to have violated sanctions on exporting equipment to Iran and North Korea.

It agreed to pay a fine and also make staff changes; the latter part of the agreement was not carried out and it was then hit with a seven-year ban on importing components from American companies.

Trump is to meet Republicans in the House on Tuesday evening (Wednesday AEST) and the following day with Republicans in the Senate; the changing of the bill is expected to figure at both meetings.

The reinstatement of the sales ban was led by Senators Tom Cotton (Republican – Arkansas), Marco Rubio (Republican – Florida), Chuck Schumer (Democrat – New York) and Chris Van Hollen (Democrat – Maryland).

ZTE resumed trading on the Hong Kong stock exchange last Wednesday. Its shares plunged nearly 40% when trading began, knocking off about US$3 billion from the company's value.


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Sam Varghese

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Sam Varghese has been writing for iTWire since 2006, a year after the site came into existence. For nearly a decade thereafter, he wrote mostly about free and open source software, based on his own use of this genre of software. Since May 2016, he has been writing across many areas of technology. He has been a journalist for nearly 40 years in India (Indian Express and Deccan Herald), the UAE (Khaleej Times) and Australia (Daily Commercial News (now defunct) and The Age). His personal blog is titled Irregular Expression.



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