Published: Thu, June 07, 2018
Finance | By Jaime Brady

U.S. Strikes Deal to Help China's ZTE, Commerce Secretary Says

U.S. Strikes Deal to Help China's ZTE, Commerce Secretary Says

The deal apparently includes a massive fine for ZTE's non-compliance with an earlier settlement over its breaking of Iran sanctions, as well as the replacement of its management team. ZTE's failure to comply with these terms triggered the suspended denial order that prohibits American companies from doing business with the Shenzhen-based company, plunging it into crisis.

A man walks past a building with the ZTE logos in Beijing in a photo taken last month. The agreement is also expected to call for other concessions from ZTE, including new board members and increased USA oversight of its business.

The Commerce Department plans to amend the agreement to count part of ZTE's previous fine from a year ago ($360 million) as part of the total penalties.

That was a serious problem for ZTE because the company is heavily dependent on USA components for its smartphone business. But now, Reuters is reporting that ZTE has signed a preliminary deal that could allow ZTE to resume operations.

Twitter Reacts as Marco Cecchinato Stuns Djokovic
I'm very happy because it's unbelievable to beat Novak Djokovic in a quarter-final at Roland Garros . The storm seemed to have blown itself out and Djokovic served for the set at 5-3.

Stephen Curry edges LeBron James for 2nd most playoff 3-pointers
Houston's third quarter performance undid all of its hard work , but it proved that breaking down the Warriors isn't impossible. He had been taking antibiotics and using drops after being poked in the eye by Draymond Green in the first half Thursday.

'Destiny 2: Forsaken' trailer runs through all the big changes
The Digital Deluxe Edition of Forsaken comes with the expansion, the Annual Pass, pre-order bonuses, and the Awoken Legend set. This investment will give Bungie the resources to help create and maintain many different franchises at the same time.

A month ago, we reported that ZTE was on life support and had made a decision to mostly pause operations after being given a hefty ban from the U.S. government over lies it told as a part of a previous agreement stemming from related illegal shipments of products to Iran. It has enjoyed the backing of Chinese President Xi Jinping, who has been negotiating with Trump over a broader trade agreement. "Congress should move in a bipartisan fashion to block this deal right away". On Tuesday, Commerce Department spokesman James Rockas confirmed that "no definitive agreement [had] been signed by both parties". Smaller makers of optical components, including Oclaro and Acacia, rely more heavily on ZTE's business. This year, the Commerce Department learned that several of those executives received bonuses and remained at ZTE, and that discovery prompted the export ban. The company was allowed continued access to the United States market under the 2017 agreement. The company relies on USA -made components for many of its products, and also sells many of those products to US customers.

As part of a new agreement, the sources said, ZTE will retain another compliance contractor in addition to the three-year court-appointed monitor imposed by the plea agreement.

Things have changed dramatically for ZTE in the last few weeks.

Acacia Communications shares are up 4.9%.

Like this: