The US Department of Commerce (DoC) formally lifted a seven-year ban on US companies selling components and software to China-based ZTE after it complied with all the requirements of a settlement agreed in June.
ZTE said in a statement the department’s Bureau of Industry and Security terminated the denial order and removed it from the denied persons list, effective immediately.
The vendor paid a $1 billion fine in June and last week deposited $400 million into an escrow account, clearing the way for it to resume operations. It also elected a new eight-member board and appointed a new company president as stipulated by the deal.
In a statement, the DoC noted the latest sums are in addition to penalties totalling $892 million ZTE paid when it settled an original case relating to breaches of US government trade embargos covering Iran in March 2017.
Wilbur Ross, US secretary of commerce, said the DoC is confident the “three interlocking elements” comprising the suspended denial order, escrow payment and a new ZTE compliance team “selected by and answerable to” the DoC will enable it to “protect US national security.”
In a preliminary statement issued to investors last week, ZTE warned it expects to post a heavy net loss for the first half of this year as a result of the suspension of operations after the US imposed the trade ban. The company noted the loss could total between CNY7 billion ($1 billion) and CNY9 billion, compared with a profit of nearly CNY2.3 billion in H1 2017.
US companies were barred from selling components to ZTE after the DoC determined the company made false statements during settlement talks and a probationary period in 2017.