A sign of ZTE Corp is pictured at its service centre in Hangzhou, Zhejiang province, China May 14, 2018.
According to Reuters, "the preliminary deal includes a $1 billion fine against ZTE, plus $400 million in escrow to cover any future violations". But after the Commerce Department determined that ZTE did not abide by those original sanctions, the company was hit with an even harsher penalty: It was not allowed to buy USA parts.
The ban in effect nearly destroyed ZTE as it now relies on many components from American companies. Reuters reports U.S Commerce Department ban on ZTE is likely to be lifted although " no definitive agreement has been signed by both parties" just yet.
ZTE previous year settled criminal and civil charges in connection with its violation of US sanctions on Iran and North Korea.
The reprimand and forfeiture of bonuses were part of the original settlement that ZTE had reached with the United States government.
Ross said on Sunday he had been having frank, useful talks in China about exports, as Washington presses its message to Beijing about structural economic changes amid the festering trade dispute.
He also said ZTE was "reflective of the larger trade deal we are negotiating with China and my personal relationship with President Xi".
Ross also said that the company will have to replace its entire management and board of directors as part of the deal. "Congress should move in a bipartisan fashion to block this deal right away". It would also allow unfettered site visits to verify that US components are being used as claimed by the company and post calculations of USA parts in its products on a public website. Smaller makers of optical components, including Oclaro and Acacia, rely more heavily on ZTE's business.
So for the last month, ZTE has been desperately looking for a way to get back into business.
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