Bipartisan Senate effort aims to override Trump’s deal to save ZTE

Senators Move To Reverse Trump's Deal Lifting Sanctions On China's ZTE

Senators Move To Reverse Trump's Deal Lifting Sanctions On China's ZTE

In early June, the White House announced ZTE would be able to resume buying US parts after it agreed to pay a $1 billion fine and submit to USA oversight. It would also ban US government agencies from purchasing any devices or services from ZTE or Huawei, another major Chinese telecom firm, or using government loans to subsidize any subsidiaries or affiliates of the two companies.

Trump has come under scathing criticism from members of his own party, who viewed the president's efforts to help ZTE as anathema, both economically and in terms of national security. Among other things, it would restore penalties on ZTE for violating USA export controls and bar US government agencies from purchasing or leasing equipment or services from the Chinese company.

ZTE must replace the boards of directors of two corporate entities within 30 days, according to a 21-page order signed June 8 and published on Monday on the Commerce Department website along with the settlement agreement.

Earlier this year, USA officials banned ZTE from working with U.S. companies - a move brought on by revelations that the company shipped US-made parts to Iran and North Korea and then lied about giving company executives involved with the deals large bonuses.

Under the settlement, ZTE will pay a total civil penalty of $1.7 billion, including $361 million already paid as part of a March 2017 agreement, the $1 billion fine and the $400 million that will go into escrow.

The U.S. commerce department can exercise discretion in granting exceptions. ZTE then ceased major operations.


The Chinese company has been accused of violating US sanctions by selling sensitive equipment to both North Korea and Iran. After 10 years, if there are no violations, the $400 million will be returned to ZTE. The coordinator will have a staff of at least six employees funded by ZTE.

Legislators said they are planning to block the ZTE deal in an amendment to the National Defense Authorization Act, a big defense policy bill the Senate is due to debate this week.

But a number of United States lawmakers aren't satisfied with that agreement, saying the issue extends beyond punishment and is more about national security.

A separate monitor was appointed to a three-year term by a USA federal court in Texas last year.

Senators in support of the original deal also think that it is unrealistic for USA officials to police ZTE's future actions, as the Chinese company could still conduct improper business even under a watchful eye. "We believe ZTE will make the payment as soon as possible (we estimate in a few days)".

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