ZTE Avoid Imminent Collapse As US Lifts Ban On Exports To The Chinese Phone Maker

The United States on Friday formally lifted a crippling ban on exports to China’s ZTE, rescuing the smartphone maker from the brink of collapse after it was denied key components.

ZTE

The US Commerce Department said it would still monitor the company to prevent future violations of US sanctions on Iran and North Korea.

“While we lifted the ban on ZTE, the Department will remain vigilant as we closely monitor ZTE’s actions to ensure compliance with all US laws and regulations,” Commerce Secretary Wilbur Ross said in a statement.

But the move to reverse the harsh penalties on the company, made US President Donald Trump’s insistence, has left US lawmakers irate. Congress has taken steps to keep the ban in place and accused Trump of rewarding a company which had repeatedly flouted American law, lied to authorities and engaged in espionage.

The Commerce Department in April banned US companies from supplying ZTE with crucial components, forcing it to halt operations, after officials concluded the company repeatedly lied and failed to address violations of US sanctions.
But as a favour to Chinese President Xi Jinping, Trump ordered Commerce to ease the penalties on ZTE.

In an agreement struck last month, Washington agreed to lift the export ban if ZTE paid an additional $1 billion fine — beyond the $892 million penalty imposed in March of last year.

The company also was required to replace its board of directors, retain outside monitors and put $400 million in escrow to cover any future violations — a final step it took this week.

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