Economy, Sci & Tech

US Publishes Details of ZTE Settlement

US Publishes Details of ZTE SettlementUS Publishes Details of ZTE Settlement

ZTE’s settlement with the US Commerce Department that would allow China’s No. 2 telecommunications equipment maker to resume business with US suppliers was made public on Monday, days after the company agreed to pay a $1 billion fine, overhaul its leadership and meet other conditions.

But the ban on buying US parts, imposed by the department in April, will not be lifted until the company pays the fine and places $400 million more in escrow in a US-approved bank, the agency said, CNBC reported.

ZTE did not immediately respond to requests for comment on Monday. ZTE, whose survival has been threatened by the ban, secured the lifeline settlement from the administration of US President Donald trump last Thursday. White House trade adviser Peter Navarro said on Sunday that Trump agreed to lift the ban as a personal favor to the president of China.

 Board Overhaul

ZTE must replace the boards of directors of two corporate entities within 30 days, according to a 21-page order signed June 8 and published on Monday on the Commerce Department website along with the settlement agreement.

All members of ZTE’s leadership at or above the senior vice president level also must be terminated, along with any executive or officer tied to the wrongdoing.

ZTE pleaded guilty last year to conspiring to evade US embargoes by selling US equipment to sanctioned countries. The ban was imposed after the company made false statements about disciplining some executives responsible for the violations. ZTE then ceased major operations.

Under the settlement, ZTE will pay a total civil penalty of $1.7 billion, including $361 million already paid as part of a March 2017 agreement, the $1 billion fine and the $400 million that will go into escrow.

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