After announcing a seven-year ban on Chinese telecom major ZTE in April for allegedly failing to discipline employees blamed for illegally shipping goods to countries under US trade embargo, the US Federal Trade Commission (FTC) Friday reversed its decision shortly after the company deposited $400 million in a U.S. bank escrow account as part of a settlement reached last month.
The settlement, worked out by ZTE and Trump administration officials last May, called for the Chinese tech major to pay a total of $1.4 billion as fines for allegedly violating a US trade embargo against Iran and North Korea. As part of the settlement, ZTE had paid $1 billion to the US Treasury in June.
In a press statement, US Commerce Secretary Wilbur Ross said that his department will make sure ZTE complies with US laws henceforth. “The department will remain vigilant as we closely monitor ZTE’s actions to ensure compliance with all U.S. laws and regulations”, said Ross.
Days after the US Department of Commerce imposed sanctions on ZTE, the Chinese telecom equipment maker protested its innocence, saying it won’t accept the ‘unfair’ penalties. It also threatened to seek legal action ‘if required’ to get the decision overturned.
Meanwhile, US President Donal Trump also did a volte-face in May, saying he’s reconsidering the ban out of humanitarian reasons, given that the ban would very likely shut down the company, resulting in thousands of people losing their jobs. He also said that he’s considering lifting the sanctions as a personal favor to Chinese President Xi Jinping.
As a refresher, The US Department of Commerce in April banned American companies from doing business with ZTE for a period of seven years after the company allegedly broke an agreement to discipline employees who were blamed for illegally shipping goods to countries under US trade embargo.