No agreement yet between US, China on ZTE: Trump aide

Alicia Cross
June 8, 2018

On Tuesday, Commerce Department spokesman James Rockas confirmed that "no definitive agreement [had] been signed by both parties".

ZTE also did not immediately respond to requests for comment.

The sources requested anonymity because they were not authorized to publicly discuss the matter. In March 2017, ZTE agreed to pay that fine and also to a seven-year suspended denial of export privileges, which would go into effect if ZTE broke the agreement during that time.

ZTE's survival has been a topic of discussion in high-level US-China trade talks.

There are also some political ramifications to this deal - which are outside the scope of AnandTech's purview - but as the New York Times notes, many see this as part of a larger peace offering in ensuring a new trade deal between the U.S. and China. The United States has reached a deal with the Chinese telecommunications giant that includes a $1 billion fine, according to Commerce Secretary Wilbur Ross. ZTE reached an agreement to turn over $1.19 billion and punish executives involved in the scheme, but in April the US determined that the company hadn't lived up to its promises. That was a potential death blow to ZTE, which relies on USA technology for an estimated 25 to 30 percent of its components. Nonetheless, Chinese trade officials have made reaching a deal on ZTE a major priority and news of the agreement may ease some of the tensions between the two countries.

Ross said the deal was finalized at 6 a.m. on Thursday morning in a 23-page agreement. This includes once again being able to receive Qualcomm SoCs and the Android OS for their smartphones, along with the numerous components used in their networking gear.

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The ban in effect nearly destroyed ZTE as it now relies on many components from American companies.

Shenzhen-based ZTE has a subsidiary in Richardson, Texas. While it did fire the four employees, the company admitted to making false statements about the others, handing out full bonuses.

After having been found to have sold equipment to sanctioned countries such as Iran and North Korea, ZTE was previously fined $1.19 billion. The company was subverting USA laws by buying United States components, incorporating them into its own devices which it exported to Iran and North Korea. Finally, ZTE will have to place an additional $400 million in escrow for the next 10 years.

"ZTE is essentially on probation", said Amanda DeBusk, chair of the global trade and government regulation practice at Dechert LLP and a former commerce official.

Last year, ZTE paid over $2.3 billion to U.S. suppliers, a senior ZTE official told Reuters last month.

Other reports by Free-Prsite

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