The United States and China have reached a deal that allows the Chinese telecommunications giant ZTE Corp.to stay in business in exchange for paying an additional $1 billion in fines and agreeing to let USA regulators monitor its operations.
According to the Hong Kong-based English-language daily, "The reprimand and forfeiture of bonuses were part of the original settlement that ZTE had reached with the U.S. government". The government will suspend the 10-year ban but it can activate the ban if there are any violations.
In addition, Ross said that a compliance team chosen by the United States will be embedded at ZTE and that the Chinese company must change its board and executive team within 30 days. The United States has reached a deal with the Chinese telecommunications giant that includes a $1 billion fine, according to Commerce Secretary Wilbur Ross. The Commerce Department said that ZTE must also put $400 million in escrow - a sum that it would forfeit if it violated today's agreement. China has vowed to retaliate on everything from US soybeans to airplanes, and said it will abandon its commitments if the USA follows through on its tariff threat.
Ross said the USA will install its "own compliance people" to monitor the company and shareholders will bring in new management and board.
ZTE ceased major operations in April after a seven-year ban was imposed on the company for breaking a 2017 agreement that was reached after it was caught illegally shipping goods to Iran and North Korea. It was reported that last month T-Mobile was going to walk away from an agreement worth more than $1 billion to distribute ZTE smartphones, among other products, in the U.S. Separately, Qualcomm is trying to get Chinese approval for its pending US$44 billion acquisition of NXP Semiconductors NV NXPI.O .
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ZTE's survival has been a topic of discussion in high-level U.S.
President Donald Trump has drawn fire from Congress for intervening in the case to rescue a Chinese company that had violated US sanctions against two rogue nations that have been pursuing nuclear weapons programs.
"We executed a definitive agreement with ZTE", Ross told CNBC Thursday.
It wasn't exactly a blazing fast process, costing ZTE billions as the Chinese multinational telecommunications equipment and systems company essentially had to shut down operations for the better part of two months, but you can probably expect phones like the Android Go-powered Tempo Go to be back in stock soon enough.
Shares of Qualcomm Inc rose 2 percent to $61.255, while NXP jumped 6.2 percent to $121.60.