ZTE Reaches Deal With U.S. To Lift Ban


An export ban was imposed on China-based ZTE several weeks ago by the Department of Commerce in response to the violation of an earlier settlement in a sanctions violation matter. U.S. companies were no longer allowed to sell products to ZTE which meant that the company was no longer able to source processors from Qualcomm for its smartphones. ZTE ceased its business operations soon after and worked hard to settling the matter with the U.S. government. A deal has now been reached which paves the way for ZTE to resume business operations.

The ban was imposed for seven years and had ZTE come to a settlement with the department, it would probably have suffered irreparable damage to its business. ZTE expected to lose $3 billion as a result of the ban.

The U.S. Department of Commerce has signed an escrow agreement with ZTE, it now has to complete the $400 million escrow deposit before the ban can be lifted. A notice informing that the ban has been lifted will be issued by the department’s Bureau of Industry and Security after the $400 million escrow payment is made.

The department has also said that this is the “toughest penalty and strictest compliance regime the Department has ever imposed in such a case,” adding that “It will deter future bad actors and ensure the Department is able to protect the United States from those that would do us harm.”

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