China's ZTE expected to take last step to lift ban -U.S. official
June 22 (Reuters) - ZTE Corp is expected to
deposit $400 million in an escrow account in a U.S. bank in the
"next couple of days," the last step the Chinese company must
take before a ban on U.S. suppliers can be lifted, a U.S.
Department of Commerce official told Reuters on Friday.
ZTE, which makes smart phones and networking gear, agreed to
pay a $1 billion penalty and put $400 million in escrow as part
of a settlement it reached on June 7 with the Commerce
Department to regain access to the U.S. market, which it needs
ZTE, China's second-largest telecommunications equipment
maker, ceased major operations after the United States imposed
the ban in April. The company had broken a prior agreement, the
Commerce Department said, by making false statements about
disciplining executives involved in illegally shipping U.S.
goods to Iran and North Korea, which are subject to U.S.
sanctions themselves, that led to nearly $900 million in civil
and criminal penalties to U.S. authorities last
The escrow account in the new settlement is designed to
allow the U.S. government access to the $400 million if ZTE
violates the latest deal.
An escrow agreement, which defines the conditions under
which the money could be released, was in the process of being
finalized, sources told Reuters on Friday.
ZTE is hopeful the $400 million can be deposited on or
before Monday, one person familiar with the matter said on
The company paid the $1 billion penalty last week, Reuters
reported on Tuesday, citing sources.
Spokespeople for ZTE did not immediately respond to requests
The decision to lift the ban was made by President Donald
Trump as a way of showing good will to the president of China,
White House trade adviser Peter Navarro has said.
The Republican-controlled U.S. Senate passed legislation
this week that would overturn the settlement, in a rare rebuke
But the measure, an amendment to a massive defense policy
bill, is still several steps from becoming law, and the White
House has said it will push its allies in Congress not to let
the provision move forward.
ZTE paid Qualcomm and over 200 other U.S. companies
more than $2.3 billion in 2017, including over $100 million each
to Intel, Broadcom and Texas Instruments
, a senior ZTE official told Reuters last month.
Under the new Commerce Department settlement, ZTE agreed to
numerous conditions beyond monetary penalties, including
changing its board and leadership within 30 days.
(Reporting by Karen Freifeld; additional reporting by Patricia
Zengerle in Washington; editing by Leslie Adler)
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