ZCZC
BCN-31
US-CHINA-TRADE-TELECOM-ZTE
US lets ZTE resume some activity
WASHINGTON, July 4, 2018 (BSS/AFP) – The United States has temporarily
allowed Chinese telecoms company ZTE to resume some activities while it works
to meet conditions set by Washington in a politically charged settlement
reached last month.
In a Federal Register notice released Tuesday, the Commerce Department gave
ZTE until August 1 to continue supporting its existing US equipment and
networks, lifting some restrictions put in place in April that had brought
the company to the brink of collapse.
The waiver does not permit companies to begin any new business with ZTE,
however.
The move follows President Donald Trump’s decision in May to spare ZTE as a
personal favor to Chinese President Xi Jinping.
In April, the Commerce Department banned the sale of crucial US components
to the company after finding it had repeatedly lied and failed to take action
against employees responsible for sanctions violations.
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.
ZTE took one of those steps last week, removing its board of directors,
naming eight new board members and firing top executives.
However, The Wall Street Journal reported Friday that incoming board
members retained ties to ZTE’s controlling shareholder, a state-backed
entity, and that former members would remain influential over the company.
Trump’s reprieve for ZTE outraged lawmakers, who have advanced legislation
to block the deal and who say it rewarded a company which had repeatedly
broken US law and engaged in espionage.
The detente over ZTE comes as trade relations between Washington and
Beijing continue to worsen.
The United States on Friday is due to begin enforcing tariffs on more than
$30 billion in Chinese imports as retribution for what Washington describes
as Beijing’s theft of American technology and other unfair trade practices.
Beijing has vowed to respond with its own tariffs immediately, which Trump
has said will invite far steeper US counter-measures, potentially covering
another $400 billion in Chinese goods.
BSS/AFP/HR/1200