ZTE clears another hurdle with escrow agreement, ban still in place
US and ZTE sign escrow agreement; when ZTE completes US$400 million in an escrow account the ban on the company will be lifted
ZTE Corp has signed an agreement with the US that will allow the Chinese telecommunications company to deposit US$400 million in an escrow account, the final step required before the US Commerce Department lifts a crippling ban of nearly three months.
“Once ZTE has completed the $400 million escrow deposit,” the Commerce Department said in a statement on Wednesday, the agency will “issue a notice lifting the denial order.”
The removal of the denial order, which the Commerce Department put in place to prevent ZTE from buying any crucial American electronics parts for seven years, will let ZTE resume operations by regaining access to US suppliers.
Multiple sources have said Commerce Department officials met with ZTE executives on Monday in Washington to work out the final details of the agreement. Rebecca Glover, director of public affairs for the agency, said no meetings between Commerce and ZTE took place.
ZTE has been in a months-long effort to resume operations after the US banned it in mid-April from buying American parts, penalising ZTE for violating US sanctions by selling products to Iran and North Korea.