ZTE Pays $1 Billion Fine in Settlement With U.S.

ZTE Pays $1 Billion Fine in Settlement With U.S.

ZTE Pays $1 Billion Fine in Settlement With U.S.

China's second largest telecom equipment maker (after Huawei) has reportedly signed an agreement that would lift the U.S. Commerce Department's ban. ZTE relies on USA parts and the ban also hurt ZTE's us suppliers.

The fine announced today comes on top of $892 million ZTE has already paid for breaking US sanctions by selling equipment to North Korea and Iran.

The Commerce Department plans to amend its settlement agreement from previous year and count the $361 million ZTE paid as a part of that, allowing the U.S.to claim a total penalty of as much as $1.7 billion, the sources told Reuters.

The Trump administration came up with a tentative deal in May to get ZTE back into business by lifting the ban and imposing other punishments instead. In exchange, ZTE would have to pay a total of $1.7 billion in penalties, according to the the report.

Ross, speaking about the agreement on CNBC on Thursday, said he did not think the arrangement would have any effect on tariff talks with China.

Senate Majority Leader Charles E. Schumer called for Congress to reverse the decision, which is unlikely.

The United States has struck a deal with ZTE, ending a high-stakes dispute with China. They claim they underestimated how important USA technology was to ZTE's products.

ZTE did not immediately respond to requests for comment.

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■ ZTE must also change its board of directors and executive team within 30 days. Under the terms of its guilty plea, ZTE paid $890 million in fines, and agreed to fire some senior staff, and strip bonuses from 35 others.

US senators said they plan legislation to roll back the agreement. Published reports suggested that the ZTE ban had become a bargaining chip in the Trump Administration's trade negotiations with China. Gogo Wireless was one of the first USA companies to speak publicly about the potential impact of the ZTE ban.

Eric Hirschhorn, a former USA undersecretary of commerce who had been involved in the ZTE case, said "the government is merely setting a price for doing business instead of giving them the punishment they deserve".

The company was found to have shipped its sophisticated telecommunications equipment to both nations and to have repeatedly lied to US investigators about its actions. The U.S. position has been that the fine is a law enforcement action, which should not be included in the discussions around trade.

Qualcomm gains 2.5% and NXP is up 3.2%. "The ZTE case was a thorn in the side for China".

The Chinese Commerce Ministry said Thursday that some progress was made in talks that ended last weekend.

Acacia Communications shares are up 4.9%.

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