ZTE has already paid a $1.19 billion fine for violating United States sanction. The entire management board must step down within 30 days, and the manufacturer will have to pay for a team of "special compliance coordinators" to monitor for further sanctions busting. Earlier this month, Trump announced he wanted to help ZTE, as part of negotiating a trade deal with China.
Washington and Beijing have reached a deal to ease sanctions that brought Chinese smartphone maker ZTE to the brink of collapse, the US Commerce Department announced Thursday.
The company was found to have shipped its sophisticated telecommunications equipment to both nations and to have repeatedly lied to USA investigators about its actions.
"This is a pretty strict settlement ..."
Earlier, Wilbur Ross stated that the U.S. was looking at alternatives to the debilitating sanctions threatening the survival of ZTE.
Under the terms of the settlement, ZTE is paying an immediate $1B fine, on top of the existing $892M in fines they've already paid related to their misconduct in this case.
The deal will force ZTE to pay an additional $1 billion fine and place $400 million in escrow in the event the company violates sanctions again.
The US government launched an investigation into ZTE 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 US technology companies.
ZTE had previously violated USA sanctions on North Korea and Iran.
The company was fined $1.2 billion a year ago.
Under this new agreement, ZTE will retain compliance contractor in addition to the three-year court-appointed monitor imposed by the plea agreement.
Acacia Communications shares are up 4.9%. "It's unprecedented to have U.S. agents as monitors ..." This would allow the USA to quickly re-instate the ban if ZTE violates the terms of the 10 year agreement.
USA companies Qualcomm (QCOM) and Intel (INTC) account for 43 percent of the materials used in ZTE's Chinese-made handsets and networking equipment, according to tech research firm IDC. The Pentagon in May ordered retail outlets on US military bases to remove from the shelves smartphones made by the two companies.
Regardless of those talks, the Trump administration is facing a deeply hostile reaction from Congress, where there is bipartisan opposition to the deal.
Thursday's agreement was "a prerequisite for making broader progress", DeBusk said.