It has been a weird couple of months for ZTE since the US Commerce Department imposed a complete trade ban on ZTE that cut it off from its US suppliers. ZTE was forced to shut down while it worked on a solution with the government, and now it's back in action. The Commerce Department has confirmed that ZTE followed through with the new settlement requirements, so the trade ban is no more.
This situation goes back several years when ZTE was caught selling technology to Iran in violation of US sanctions. It was fined almost a billion dollars, and forced to shake up its management. Earlier this year, the Commerce Department decided it hadn't sufficiently disciplined mid-level managers, so it activated the previously suspended trade ban.
As part of the new settlement, ZTE has paid another $1 billion fine, and fired all executives and board members. ZTE also had to place an additional $400 million in escrow, which would be forfeited in the event it screws up again. That was the last piece of the puzzle, and ZTE just made the deposit. In response, the ban has been dropped.
It's still unclear how things will turn out for ZTE. Its future has become something of a political football after Trump expressed strong support for returning it to business in an ill-advised tweet. Congress has taken up a bill that could include renewed sanctions on ZTE, but it's unknown if they will be included in the final bill. If the president does sign new sanctions into law, does ZTE get its money back?
- Commerce Department