US Lifts Trade Ban On ZTE

Darnell Taylor
July 15, 2018

The US Commerce Department on Friday announced it has lifted its export ban on ZTE, after the Chinese telecom giant deposited the final tranche of a $1.4 billion penalty the US imposed against it.

According to the Commerce Department, the moment ZTE fulfills the clauses of the United States by submitting the penalty amount of £303 million or $400 million, the procedures related to the lifting of the ban will be initiated on behalf of BIS or Bureau of Industry & Security.

The ban stripped ZTE of its access to crucial USA -based suppliers, including Qualcomm. Three interlocking elements - a suspended denial order, the $400 million in escrow, and a compliance team selected by and answerable to the Department - will allow the Department to protect USA national security.

Shen Meng, director of boutique investment bank Chanson & Co, said the overwhelming response from the stock market reflects the optimism that ZTE is on the way back to business.

Ross said the deal will protect US national security, despite claims by lawmakers in Congress that ZTE and other large Chinese corporations can not be trusted with sensitive USA technology.

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ZTE, which relies on USA components for its smart phones and networking gear, ceased major operations after the ban was ordered in April.

But the move to reverse the harsh penalties, made at President Donald Trump's insistence, has left USA lawmakers irate. The current ban could have lasted seven years.

Reuters reported on USA demands for a deal on June 1, and on June 5, revealed that ZTE had signed a preliminary agreement with the Commerce Department, along with the fine and other terms.

We also note that our nation's six top intelligence leaders testified before the Senate Intelligence Committee in February 2018 about their concern that ZTE, Huawei, and other Chinese state-directed telecommunications companies are beholden to the Chinese government and Communist Party, which provides the capacity for espionage and intellectual property theft, and therefore poses clear threats to the national security, people, and economy of the United States. It also broke news of the ban in April.

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