Chinese smartphone giant ZTE to pay $1bn fine in US

Chinese smartphone giant ZTE to pay $1bn fine in US

"Now, if they do violate it again, in addition to the billion dollars they're paying us right up front, we have them put $400 million in escrow so the total deal is a billion 400 million", Ross said.

The Chinese cellphone maker also agreed to replace its entire board of directors and senior management in 30 days and to have a compliance team assembled by the U.S. Commerce Department embedded in its operations.

-China trade talks. Trump tweeted on May 14 that he and Chinese President Xi Jinping were working together to help ZTE "get back into business, fast".

ZTE's survival has been a topic of discussion in high-level US-China trade talks.

On Tuesday, it was reported that ZTE, the fourth-largest smartphone maker in the USA by market share, had agreed in principle to a settlement that would lift the seven-year Commerce Department ban preventing U.S. companies from doing business with it.

The ban amounted to a death sentence for the company, which relies on US parts.

Acacia rose as much as 4.5% intraday, but ended the session down 1% to 33.53.

Chinese telecommunications giant ZTE agreed to pay a $1 billion fine and submitted to the strictest compliance measures ever issued by the Commerce Department on June 7 in order to regain access to USA technology crucial to its business.

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Ross said on Sunday he had been having frank, useful talks in China about exports, as Washington presses its message to Beijing about structural economic changes amid the festering trade dispute.

USA lawmakers immediately attacked the agreement, citing intelligence warnings that ZTE poses a national security threat.

The ban came as a result of ZTE failing to punish staff who sold kit featuring American technology to Iran and North Korea.

Democrat and Republican senators denounced Trump's offer to ease the ZTE sanctions as an offer that imposed punitive measures the company had already disregarded once before, while garnering no true concessions from China. For this "pattern of deception, false statements, and repeated violations", the US Commerce Department issued the ban in April. This would allow the United States to quickly re-instate the ban if ZTE violates the terms of the 10 year agreement.

U.S Senate Democratic leader Chuck Shumer quipped, "By letting ZTE off the hook, the president who roared like a lion is governing like a lamb when it comes to China". In 2012, the U.S. House Intelligence Committee said the companies posed a national security threat and advised regulators to block any of the companies' mergers or acquisitions in the U.S. Bill Nelson and Marco Rubio are backing the new amendment, along with Sens.

A US investigation into ZTE was launched after Reuters reported in 2012 the company had signed contracts to ship hardware and software worth millions of dollars to Iran from some of the best-known usa technology companies.

But it came shortly after Chinese officials offered to buy an additional $70 billion in United States goods to cut the trade deficit, moving toward meeting one of Trump's central demands on trade.

"The hope is accommodating China's concerns on ZTE will open the door to favorable decisions on Qualcomm and other deals", said Altbach.

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