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ZTE fined $1 billion

ZTE fined $1 billion

Commerce Secretary Wilbur Ross banned us companies from doing business with ZTE in April, after his agency learned that ZTE had not followed through on commitments made back in 2016.

"The Commerce Department plans to amend its 2017 settlement agreement and count the $361 million ZTE paid as a part of that, allowing the United States to claim a total penalty of as much as $1.7 billion", writes Reuters.

That penalty was assessed following an investigation showing that ZTE had violated US sanctions and had provided technology to Iran and North Korea.

Early reports claimed that ZTE had already signed an agreement with the USA with these terms, but a spokesperson in touch with Politico says that "no definitive agreement has been signed by both parties".

It would also ban the USA government from using grants or loans to subsidize Huawei, ZTE or any subsidiaries or affiliates.

ZTE said it would be forced to go out of business if its supply of optical components from companies such as Acacia, Finisar and NeoPhotonics dried up. Bill Nelson and Marco Rubio are backing the new amendment, along with Sens.

Mr. Trump appears to be using ZTE's punishment as a bargaining chip in negotiations with China, rather than a matter of law enforcement.

Ross said the USA will install its "own compliance people" to monitor the company, and shareholders will bring in new management and board.

Last year, ZTE paid over $2.3 billion to United States suppliers, a senior ZTE official told Reuters last month.

It had been speculated that any deal could be scuppered by resistance from both Democrats and Republicans in US Congress, who believe Trump is bowing to pressure and that ZTE could be a possible threat to national security.

In line with recent speculation, the tech giant agreed to what Commerce Secretary Wilbur Ross aptly labeled as "the strictest and largest settlement fine that has ever been brought by the Commerce Department against any violator of export controls".

Qualcomm gains 2.5% and NXP is up 3.2%.

ZTE depends on US-made components to build its smartphones and networking equipment.

On Thursday, he defended the new deal on CNBC, though, saying that "it imposes the most strict compliance that we've ever had on any company, American or foreign" and is meant to deter future wrongdoing.

Republican Senator Tom Cotton of Arkansas and Democratic Senators Chris Van Hollen of Maryland and Chuck Schumer of NY introduced an amendment to the National Defense Authorization Act that would stop the president from offering ZTE a deal.

Trump argues that bilateral trade deficits reflect bad deals for the USA that need to be rewritten. To satisfy Trump's demand for a reduction in the $375 billion in goods US trade deficit with China, the government in Beijing has reportedly offered to buy up to $70 billion more each year in USA products.

ZTE supplier Oclaro Inc rose nearly 1% while Acacia Communications Inc. was down 1.5%.