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US lifts export ban on suppliers to China's ZTE

AFP  |  Washington 

The has formally lifted a crippling ban on exports to China's ZTE, rescuing the maker from the brink of collapse after it was denied key components.

The Commerce Department yesterday said it would continue to monitor the company to prevent further violations of sanctions on and

"While we lifted the ban on ZTE, the Department will remain vigilant as we closely monitor ZTE's actions to ensure compliance with all laws and regulations," said in a statement yesterday.

But the move to reverse the harsh penalties, made at Donald Trump's insistence, has left US lawmakers irate. has taken steps to keep the ban in place and accused Trump of rewarding a company which had repeatedly flouted American law, lied to authorities and engaged in espionage.

The about-face to rescue to the company created a stark contrast with the escalating trade war between and

The Commerce Department in April banned US companies from supplying with crucial components, forcing it to halt operations, after officials found further violations even after reaching a settlement in March of last year over the initial complaints.

The company had paid bonuses rather than reprimanding employees involved in illegal activity and created an "elaborate scheme" to deceive US officials and obstruct justice, US officials said.

But as a favor to Chinese Xi Jinping, Trump ordered Commerce to ease the penalties on

In an agreement struck last month, agreed to lift the export ban if paid an additional USD 1 billion fine -- beyond the USD 892 million penalty imposed in 2017.

The company also was required to replace its board of directors, retain outside monitors and put USD 400 million in escrow to cover any future violations -- a final step it took this week.

In a statement this week, Senator of Virginia, the senior Democrat on the on Intelligence, lambasted the reversal, saying the and agencies had branded ZTE an "ongoing threat" to US national security.

"This sweetheart deal not only ignores these serious issues, it lets ZTE off the hook for evading sanctions against and with a slap on the wrist," Warner said.

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Sat, July 14 2018. 02:45 IST