The U.S. Department of Commerce has now officially lifted the ban on ZTE from doing business with American companies. This will now enable Chinese firm, which the one of the leading manufacturer of telecommunication equipment, to resume its major business operations, which the company had ceased due to the ban.
The development comes a couple of days after it was announced that the U.S. Department of Commerce has reached an agreement with China’s ZTE Corp to lift the ban. The ban was imposed after the company broke an agreement reached after it pleaded guilty for illegally shipping U.S. goods and technology to Iran, which is in violation of U.S. sanctions.
As a part of the agreement, the company has deposited $400 million in an escrow account. The escrow agreement is part of a $1.4 billion settlement it reached with the Commerce Department last month to regain access to U.S. suppliers, whose components it relies on for its smartphones and networking gear.
The new settlement also includes a $1 billion penalty that ZTE paid to the U.S. Treasury last month and the $400 million in the escrow account that the United States. The government could seize the escrow amount if ZTE violates the latest settlement. Also, the $1 billion penalty is in addition to nearly $900 million ZTE paid last year.
Under the new settlement, ZTE was required to change its board and management within 30 days. In addition, the company must hire an outside compliance monitor selected by the Commerce Department.
It has also agreed to allow the U.S. government unfettered site visits to verify U.S. components are being used as claimed by the company. It has also agreed to post calculations of the U.S. components in its products on its website in Chinese and English.