Chinese phone maker ZTE saved from brink after deal with U.S.

Chinese phone maker ZTE saved from brink after deal with U.S.

Chinese phone maker ZTE saved from brink after deal with U.S.

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. The company has also been accused of posing a national-security risk to the U.S. In February, six U.S. intelligence chiefs told the Senate that hardware from the Chinese company could not be trusted and advised Americans not to use ZTE phones.

A U.S. Commerce Department spokesman said no definitive agreement has been signed by the two parties.

Under the deal, ZTE will change its board and management within 30 days, pay a $1 billion fine and put $400 million in escrow.

ZTE has agreed to a $1 billion penalty, in addition to $892 million it has already paid in penalties.

The agreement also forces ZTE to replace its board of directors and executive team and installs a US -chosen compliance team.

Following the ban on selling USA -made hardware (and potentially software) to ZTE earlier this year, it appears that the company may have reached a compromise with the us government, according to Reuters. "ZTE has also been replacing some of its top executives in a bid to make good on its pledge". He later tweeted that the ZTE talks were "part of a larger trade deal" being negotiated with China.

"Today, [the Bureau of Industry and Security] is imposing the largest penalty it has ever levied and requiring that ZTE adopt unprecedented compliance measures". But Reuters reports that ZTE and the USA government have signed a preliminary agreement that will lift the Denial Order.

He added the USA ban had caused "huge losses for the company" which had been forced to pay a "disastrous price".

The U.S. government launched an investigation into ZTE after Reuters reported in 2012 the company had signed contracts to ship hardware and software worth millions of dollars to Iran from some of the best-known U.S. technology companies.

"We will closely monitor ZTE's behavior", Ross said in a statement. According to Trump administration officials, ZTE gave numerous wayward executives their full 2016 bonuses and then lied about it to the USA government.

ZTE, which devised elaborate schemes to hide the illegal activity, agreed to plead guilty after the Commerce Department threatened to cut off its global supply chain. A big part of its business is in smartphones, and it relies on USA companies, such as Qualcomm, for the parts inside those phones.

But it came shortly after Chinese officials offered to buy an additional $70 billion in United States goods to cut the trade deficit, moving toward meeting one of Trump's central demands on trade.

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