ZTE reaches billion dollar deal with U.S. government

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The U.S. blocked ZTE's access to U.S. suppliers in April, saying the company violated a 2017 sanctions settlement related to trading with Iran and North Korea and then lied about the violations.

The Commerce Department said that ZTE must also put $400 million in escrow - a sum that would be forfeited if it violated the latest agreement.

Under the agreement, ZTE is required to change its entire board of directors and executive team within 30 days.

Amidst the white-hot trade tension brewing between the worlds two most powerful superpowers, U.S. President Donald Trump surprisingly announced his intention to help the beleaguered Chinese company which we covered here last month.

The settlement in March 2017 was reached after ZTE was found to have violated a USA trade embargo by engaging in a multi-year conspiracy to use equipment that originated in the United States for telecommunications networks in Iran.

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The telecommunications equipment maker has been on life support since a seven-year USA ban was imposed in April, breaking a 2017 agreement reached after it was caught illegally shipping goods to Iran and North Korea.

According to a report from Reuters, ZTE has reached a deal with U.S. authorities that would lift a ban that prevents it from buying parts from United States suppliers.

The denial order put ZTE's future into jeopardy because it relies on US components for so many of its products.

That was a serious problem for ZTE because the company is heavily dependent on USA components for its smartphone business.

According to the Hong Kong-based English-language daily, "The reprimand and forfeiture of bonuses were part of the original settlement that ZTE had reached with the U.S. government".

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Ross said going forward, the deal imposes the "most strict" compliance on ZTE.

One of the US companies caught in the crossfire is Qualcomm Inc, whose products account for the lion's share of chips inside ZTE smartphones. Ross, speaking on CNBC today, said that a compliance team picked by the us will be embedded at ZTE.

Ross, speaking about the agreement on CNBC today, said he did not think the arrangement would have any effect on tariff talks with China.

The story began last March when ZTE lied to the US government about disciplining employees responsible for supplying, building, and operating telecommunications networks in Iran with USA -supplied components and equipment.

ZTE also did not immediately respond to requests for comment. However, the agreement has not yet been signed by both parties.

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The problems with ZTE extend beyond its violations of sanctions.