Friday, 21 September, 2018

ZTE allowed to temporarily resume some United States business

China's ZTE Corp is seen at the lobby of ZTE Beijing research and development center building in Beijing ZTE is being allowed to temporarily operate in the U.S. until August 1
Russell Knight | 04 July, 2018, 19:31

The release by the US Commerce Department's Bureau of Industry and Security takes effect immediately and runs through the end of the month.

Under the new order, state-owned ZTE would now be allowed to support its existing handsets in the U.S. and continue operation of existing networks, among some other activities.

It allows China's No.2 telecommunications equipment maker to continue operating existing networks and equipment and provide handset customer support for contracts signed before April 15.

Republican and Democratic lawmakers in Congress have pushed back on the softer stance Trump took against ZTE, with several senators seeking the maintenance of the sales ban. It wasn't immediately clear when a permanent order might be issued, but the company is expected to be in compliance with USA demands by August 1, a person familiar with the matter told Bloomberg.

But in an agreement struck last month, Washington offered to lift the ban if the company agreed to pay an additional $1 billion fine, replace its board of directors, retain outside monitors and put $400 million in escrow to cover any future penalties. It doesn't authorize new business with ZTE, the department said. They included vice presidents Wang Keyou, Xie Jiepeng and Ma Jie, who were in charge of the legal, finance and supply chain departments, respectively.

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It is not immediately clear whether the eight departures on Tuesday were related to ZTE's compliance violation.

Lawmakers in favor of the harsh penalties argue that ZTE is a national security threat because of its close relations to the Chinese government.

Despite the agreement reached nearly a month ago, the ban is yet to be lifted amid strong opposition among some USA politicians.

The uncertainty over the ban amid intensifying U.S.

ZTE's Hong Kong-listed shares rose as much as 6.5 percent by 0700 GMT, outperforming the benchmark Hang Seng Index that dropped 1.8 percent. The U.S. Department of Commerce did not respond to requests for comment.

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