Sunday, 24 June 2018 16:04

ZTE set to meet all demands for getting back into business Featured

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An official at the US Commerce Department says Chinese telecommunications company ZTE Corporation will pay US$400 million into an escrow account within the “next couple of days”, the final step it is needed to take to have a seven-year ban lifted.

Reuters reported that the escrow agreement, which would set out the terms for releasing the money if needed, was being finalised.

The company had expressed optimism that the amount could be deposited before Monday US time, one source was quoted as saying.

Meanwhile, as part of the National Defence Authorisation Act, the US Senate has passed legislation that would reinstate the ban.

But US President Donald Trump is expected to negotiate and get the ban stripped out of the final version of the bill. The House has already passed a version of the bill that does not include the sales ban.

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 was imposed 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.

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 on 13 June. 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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