United States lifts ban on suppliers selling to China's ZTE

ZTE can once again do business with American companies

ZTE can once again do business with American companies

The U.S. Department of Commerce on Friday lifted a ban on U.S. companies selling goods to ZTE Corp, allowing China's second-largest telecommunications equipment maker to resume business.

The Commerce Department in April banned United States companies from supplying ZTE with crucial components, forcing it to halt operations, after officials found further violations even after reaching a settlement in March of past year over the initial complaints.

The $1 billion penalty was sent to the U.S. Treasury last month.

The US Commerce Department yesterday said it would continue to monitor the company to prevent further violations of US sanctions on Iran and North Korea.

The senators not only requests that the penalties be reinstated, but that the USA henceforth prohibit all government and military personnel from "using or procuring equipment from, or entering into contracts with ZTE or Huawei", because of the potential espionage threat which the companies pose.

ZTE, which relies on U.S. components for its smart phones and networking gear, ceased major operations after the ban was ordered in April.

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The company had paid bonuses rather than reprimanding employees involved in illegal activity and created an "elaborate scheme" to deceive U.S. officials and obstruct justice, United States officials said.

The Senators strongly oppose Trump's decision, carried out by the Commerce Department's Bureau of Industry and Security (BIS) to lift the seven year ban that had been imposed on ZTE for their violations of Iran sanctions. The latest $1.4 billion deal comes on top of that.

The June settlement also required ZTE to change its board and management, and to allow the USA government unfettered site visits to verify US components are being used as claimed. The news came after markets closed in Asia. ZTE also replaced its entire board of directors and senior leadership.

The US Senate paved the way for a showdown with Trump over the issue last month, when it passed an annual defense policy bill with an amendment attempting to reverse the deal. It also broke news of the ban in April.

The export ban, imposed earlier this year, effectively crippled ZTE by prohibiting USA companies from selling products or services to it.

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