The US has reached an agreement with the Chinese telecommunications corporation ZTE to lift restrictions on doing business with US companies, the US Secretary of Commerce Wilbur Ross said as quoted by Bloomberg.
“This morning we signed a final agreement with ZTE,” the secretary said. ZTE will have to pay a record fine and make changes to the management of the company within a month, the official said. “We still retain the opportunity to close [the company’s access to the US market] again,” he said in a conversation with CNBC.
According to the US official, ZTE will have to pay the US government $ 1 billion in fines, plus another $ 400 million in escrow for possible violations in the future – and that’s on top of the $1 bn fine last year.
In April, the US blocked ZTE’s access to US suppliers for a period of seven years. Washington claimed that the Chinese company violated the 2017 sanctions agreement, related to trade with Iran and North Korea, and then concealed this information. ZTE, in turn, found this decision unjust and said that the measure threatened its business.
Ross noted that the US will introduce “own compliance people” to monitor, and shareholders will attract new management and board to ZTE. An agreement that allows the company to resume work in the US is important to both parties, Bloomberg said as both states are trying to avoid a trade war that could undermine their global growth.
The US also needs China’s help in negotiations on the denuclearization of North Korea before the June 12 summit between US President Donald Trump and North Korean leader Kim Jong Un.