US lifts ZTE supplier ban

By Barry Eitel

SAN FRANCISCO (AA) – The Commerce Department announced Friday that the United States was lifting its controversial trade ban on Chinese smartphone maker ZTE.

Several months ago, the U.S. imposed a ban on American suppliers selling to ZTE due to national security concerns. The ban essentially inhibited ZTE from making its devices due its dependence on equipment from the U.S.

ZTE agreed to pay a $1.4 billion fine and completely overhaul its top executives and Board of Directors. The U.S. said that $1 billion was paid in penalties, while an additional $400 million was being held in escrow at an American bank. ZTE also paid nearly $900 million in fines to the U.S. government in March of 2017.

“While we lifted the ban on ZTE, the Department will remain vigilant as we closely monitor ZTE’s actions to ensure compliance with all U.S. laws and regulations,” Commerce Secretary Wilbur Ross said in a statement.

“Three interlocking elements – a suspended denial order, the $400 million in escrow, and a compliance team selected by and answerable to the Department – will allow the Department to protect U.S. national security.”

The ban was initially enacted because ZTE was accused of violating U.S. sanctions by selling products to Iran and North Korea. President Donald Trump eventually turned toward supporting eliminating the ban, although some Republicans and Democrats in Congress pushed to pass legislation aimed at killing the ban’s repeal, but it was not approved.

In April, ZTE complained that the ban would put the company out of business.

Democratic Senator Chuck Schumer argued against lifting the ban on Thursday night. The Senate had formalized the ban in a defense bill, but the amendment has not yet passed in the House.

“The Trump administration’s terrible ZTE deal will undermine our national and economic security, which is exactly why the Senate overwhelmingly passed bipartisan legislation to retroactively tear it apart,” Schumer said on Twitter.

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