As the U.S. Senate prepares to vote on what will likely be the final version of the 2019 National Defense Authorization Act (NDAA), some senators are making a final push for the original ban and penalties targeting Chinese telecom company ZTE to be reintroduced via an addition to the legislation.
The US Commerce Department has lifted an export ban that blocked Chinese mobile giant ZTE from doing business with US companies.
The ban stripped ZTE of its access to crucial US -based suppliers, including Qualcomm. However, Trump later announced a deal with ZTE in which the Chinese company would pay a $1 billion fine for its trade violations, as well as replace its entire management and board by the middle of July. The ban was imposed after the USA government determined that ZTE violated terms of a 2017 settlement, reached after ZTE illegally shipped United States equipment to Iran and North Korea.
After ZTE had completed the last of its required punishments by depositing US$400 million into escrow to dissuade any future indiscretions the US Commerce Department lifted all remaining bans in place on ZTE. So while this whole saga is not over entirely, ZTE are free to go about their business in the meantime and we hope that it is for a long time.
"As ZTE is finally near the end of the tunnel, we believe its current stock price incorporates an overly pessimistic view on the settlement".
Many U.S. lawmakers see the company as a national security threat and, on Thursday, a group of Republican and Democratic U.S. senators urged that ZTE's penalties be reinstated.
The Commerce Department said Friday that these measures were the "harshest penalties and strictest compliance measures ever imposed in such a case".
A US investigation into ZTE was launched after Reuters reported in 2012 that the company had signed contracts to ship hardware and software worth millions of dollars to Iran from some of the best-known USA technology companies.