The US Commerce Department on Monday revealed details of ZTE Corporation’s settlement that will allow the Chinese telecoms equipment maker to resume business with US suppliers.
As per information posted on the department’s website, the ban on buying US parts will remain in place until ZTE pays a US$1 billion fine and places US$400 million more in escrow in a US-approved bank, Reuters reports.
Also, the Chinese firm must replace the boards of directors of two corporate entities within 30 days, the report said, citing a 21-page order signed June 8 that was published along with the settlement agreement.
All members of ZTE’s leadership at or above the senior vice president level also must be terminated, along with any executive or officer tied to the wrongdoing.
ZTE pleaded guilty last year to conspiring to evade US embargoes by selling American equipment to Iran.
The ban was imposed after the company made false statements about disciplining some executives responsible for the violations. ZTE then ceased major operations.
Under the settlement, ZTE will pay a total civil penalty of US$1.7 billion, including US$361 million already paid as part of a March 2017 agreement, the US$1 billion fine and the US$400 million that will go into escrow.
The US$400 million will be held in a US bank account for 10 years and can be disbursed to the Commerce Department if ZTE fails to abide by the agreement.
After 10 years, if there are no violations, the US$400 million will be returned to ZTE, according to the Reuters report.
As part of the order, ZTE must identify in detail to the US Commerce Department all Chinese government ownership and control of ZTE, including public and private shares.
The department also will select a monitor, known as a special compliance coordinator, within 30 days to report on compliance by ZTE and its affiliates worldwide for 10 years.
ZTE, whose survival has been threatened by the ban, secured the lifeline settlement from the Trump administration last Thursday.
White House trade adviser Peter Navarro said on Sunday that President Donald Trump agreed to lift the ban as a personal favor to Chinese President Xi Jinping.
US lawmakers have attacked the agreement and plan legislation to roll it back, citing intelligence warnings that ZTE poses a national security threat.
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