UPDATE Reuters reported Chinese telecom equipment maker ZTE allegedly reached an agreement in principle with the administration, to lift the U.S. ban on buying from American suppliers, by paying an up to $1.7 billion penalty. However the Commerce Department pushed back, saying “no definitive agreement” has actually been signed.
ZTE stopped major operations soon after the ban was imposed in April; the Commerce Department said it caught the telecom breaking a deal reached in 2017 and ZTE was getting around a U.S. embargo by illegally shipping U.S. goods and technology to Iran and North Korea, Inside Towers reported.
In addition to the fine, the new, preliminary deal includes $400 million in escrow to cover any future violations, sources told Reuters. ZTE did not respond to requests for comment.
President Donald Trump earlier tweeted he directed the Commerce Department to help ZTE get back in business; Some Democrats and Republicans in Congress criticized the U.S. for helping a company that has been deemed to be a threat to America’s national security. The FBI, NSA and other security agencies earlier said ZTE and fellow Chinese telecom Huawei use their technology to spy for their government — a charge both companies deny.
“By letting ZTE off the hook, the president who roared like a lion is governing like a lamb when it comes to China,” U.S. Senate Democratic leader Chuck Schumer (NY) said in a statement. “Congress should move in a bipartisan fashion to block this deal right away.”
June 7, 2018