Trump To Allow ZTE To Resume Some U.S. Business Operations

Kārlis Dambrāns/CC BY 2.0/Flickr

Lawmakers remain concerned over the potential national security risk ZTE Corp. poses to the U.S.

Chinese telecom giant ZTE Corp. received temporary permission to resume some business, Bloomberg News reported Tuesday, while U.S. officials consider ending the seven-year ban ZTE currently faces.

The U.S. Commerce Department’s Bureau of Industry and Security authorized the temporary order, which covers July 2 to August 1, with expectations that ZTE will be in full compliance with U.S. demands by the end date.

The authorization permits China’s No. 2 maker of telecoms gear to support existing networks or equipment under contracts signed on or before April 15, when the U.S. blocked companies from selling components to ZTE for violating sanctions against Iran and North Korea. The ban had forced ZTE to announce it was shutting down.

President Donald Trump reversed course in May, saying he was reconsidering penalties on ZTE as personal favor to Chinese President Xi Jinping. Later that month, the Trump administration announced it would allow the company to stay in business after paying a $1.3 billion fine, changing its management and providing “high-level security guarantees.”

In order to comply with White House demands, ZTE wiped its board clean and appointed a new chairman last week, Bloomberg reported.

All that remains to reach full compliance is paying $400 million in escrow.

In Washington, a bipartisan group of lawmakers remains concerned about ZTE’s threat to U.S. national security and is pushing for legislation aimed at restoring harsher penalties. Lawmakers are set to resume negotiations on legislation that will try to balance concerns that ZTE presents a security risk with efforts to get the company back into business.

Comments