Commerce Secretary Wilbur Ross said Thursday that the Trump administration has a struck a deal with Chinese telecom giant ZTE.
The Trump administration yesterday announced a deal to allow the telecommunications company to resume buying from USA companies, eliminating a key sticking point for the two nations in their talks on trade.
The firm ceased its seven years operations on the United States market after the USA government accused ZTE, in April, for violating a 2017 agreement after selling components to Iran and North Korea, two regions vetoed by the U.S. government.
China-based ZTE has reportedly signed an agreement in principle that would lift a U.S. Commerce Department ban on the company which barred it from buying from U.S. suppliers. And the company will be required to host and pay for a US-selected compliance team that will oversee the company's compliance over the term of the agreement. The Chinese authorities' involvement, on the backdrop of ongoing trade negotiations with the US, have saved ZTE from almost-certain death. But Reuters reports that ZTE and the usa government have signed a preliminary agreement that will lift the Denial Order.
Under the new agreement, ZTE is also subject to changes in its corporate leadership, as well as strict BIS compliance requirements.
If it is caught violating the agreement at any point in the next decade, it will face a 10-year ban on sourcing U.S. components. Last year, the company was already fined $1.2 billion for violating USA sanctions.
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Zhongxing Telecommunications Equipment (ZTE) Corporation is a Chinese company headquartered in Shenzhen, Guangdong, China.
Reuters reports that "ZTE promised to replace its board and executive team in 30 days".
"The Chinese are well aware there's a new marshal in town", Ross said. ZTE also exported similar material to North Korea.
The White House didn't respond to a request for comment.
One week after announcing it had ceased major operations as a result of the ban, President Trump tweeted that he was working with Chinese president Xi Jinping to find a way for ZTE to "get back into business, fast".
"We have made them agree that they will adopt our code of compliance and pay for people we insert into the company to monitor that compliance", Ross said Thursday.