USA lifts ban on suppliers selling to China's ZTE

16 July, 2018, 07:04 | Author: Natasha Holloway
  • ZTE can once again do business with American companies

The US Commerce Department on Friday announced it has lifted its export ban on ZTE, after the Chinese telecom giant deposited the final tranche of a $1.4 billion penalty the US imposed against it.

A photograph circulating among employees around midnight showed ZTE's new chief executive and 10 other managers each giving a thumbs-up to the news, which was flashed on a screen at the company, according to a person familiar with the matter. In addition to violating the terms of the settlement, the company lied to the USA about reprimanding employees involved in the illegal actions.

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. The telecom equipment and smartphone maker ceased most of its operations in April after the United States government imposed a seven-year ban on its purchase of crucial U.S. technologies, including chips, for allegedly violating sanctions to export goods to Iran.

We also note that our nation's six top intelligence leaders testified before the Senate Intelligence Committee in February 2018 about their concern that ZTE, Huawei, and other Chinese state-directed telecommunications companies are beholden to the Chinese government and Communist Party, which provides the capacity for espionage and intellectual property theft, and therefore poses clear threats to the national security, people, and economy of the United States. White House trade adviser Peter Navarro said last month Trump agreed to lift the ban as a goodwill gesture to Chinese President Xi Jinping.

The $1 billion penalty was sent to the U.S. Treasury last month. The new agreement once again imposes a denial order that is suspended, this time for 10 years, which BIS can activate in the event of additional violations during the ten-year probationary period.

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As of Friday, ZTE was no longer on the Commerce Department's "denied persons list", Reuters reported.

Shares of ZTE Corp surged by 25 percent in Hong Kong on Thursday, after the company signed an agreement with the United States, paving the way for the lifting of a seven-year USA supplier ban.

ZTE was first hit with the ban in April after it violated the terms of 2017 agreement stipulating that it was not allowed to sell sensitive American technology to Iran and North Korea.

The letter notes the serious threat that the operations of Chinese telecom companies, and their agents represent to the national security of the United States of America.

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