In addition, ZTE will make changes to management, and put a further $400 million in escrow to cover possible future fines.
In April, the Chinese group was cut off from U.S. technology products for violating United States sanctions against North Korea and Iran - measures which threatened to put ZTE out of business.
It's official. China's second largest telecom equipment provider, Hong Kong listed ZTE, can now reopen its major operations and source components from America's technology companies. The order effectively cut off the company off from receiving most United States technology, and as a result of this ban, ZTE's operations, which heavily relied on importing both hardware and software from the USA, ground to a halt, putting the future of the company in doubt.
The terms outlined by Reuters are similar to the those Trump outlined in a May 25 tweet, saying that ZTE might reopen "with high level security guarantees, change of management and board, [and it] must purchase us parts and pay a $1.3 Billion fine".
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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 usa suppliers. The company will still pay a $1 billion fine on top of the $895 million it paid in 2017 from the original $1.19 billion fine.
Ross touted the deal as a victory, saying the administration's previous strict actions accomplished its goal in that it "brought ... a $17 billion company to its knees more or less put them out of business" and that the new agreement is "something I think even more effective". "This egregious behavior can not be ignored", Secretary of Commerce Wilbur Ross said in a press release at the time.
The Trump administration has walked a fine line, stressing that any ZTE deal is separate from ongoing trade negotiations with China. Their function will be to monitor on a real-time basis ZTE's compliance with US export control laws.
Update: As of June 7th, ZTE and the U.S. government have officially reached a deal which will enable the Chinese manufacturer to stay in business. Some US lawmakers are already hatching a plan to scuttle the new deal and restore sanctions that stopped US firms from sharing technology and expertise with the company.
ZTE supplier Oclaro Inc rose nearly 1 percent while Acacia Communications Inc was down 1.5 percent.