ZTE signs US agreement in principle to pay US$1.4 billion to lift sanctions and go back into business
The deal includes a US$1 billion fine against ZTE plus US$400 million in escrow in the event of future violations, sources said; including the US$361 million already paid, the final total could be US1.4 billion
ZTE Corp has signed an agreement in principle that would lift a US Commerce Department ban on buying from US suppliers, allowing it to get back into business, according to sources familiar with the matter.
The Chinese telecommunications equipment maker ceased major operations in May and has been on life support since the seven-year ban was imposed in April, after it broke a 2017 agreement by illegally shipping goods to Iran and North Korea.
Commerce Department spokesman James Rockas said on Tuesday that “no definitive agreement has been signed by both parties.”
The deal includes a US$1 billion fine against ZTE plus US$400 million in escrow in the event of future violations, sources said, adding that the terms were in line with Reuters reporting on the US demands on Friday.
The Commerce Department plans to amend its settlement agreement from last year and count the US$361 million ZTE paid as a part of that, allowing the US to claim a total penalty of as much as US$1.7 billion, sources said.