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MagyarZTE to pay US$1.4 billion fine as penance for its sins
ZTE’s battle with the US government is rather tiring at this point. The company was hit with a trade ban back in 2016 for shady practices but was allowed to get off with a heavy US$900 million fine as long as a few conditions were met. A few months ago, it was discovered that said conditions were, in fact, not met. The company was once again hit with the original ban that would've seen it unable to do business with US companies for seven years.
President Trump stepped in a few weeks ago, however, and while his efforts were initially met with stiff resistance, it would seem that ZTE finally has a way out of the mess. According to an official press release by the US Department of Commerce, ZTE will have to pay a massive fine for its transgressions to be forgiven.
“Today, BIS is imposing the largest penalty it has ever levied and requiring that ZTE adopt unprecedented compliance measures,” the release reads. “We will closely monitor ZTE’s behavior. If they commit any further violations, we would again be able to deny them access to U.S. technology as well as collect the additional $400 million in escrow. The first settlement with ZTE set a record for civil and criminal penalties in an export control case. This new settlement agreement sets another record, and brings the total penalties assessed on ZTE to $2.29 billion.”
"Under the new agreement, ZTE must pay $1 billion and place an additional $400 million in suspended penalty money in escrow before BIS will remove ZTE from the Denied Persons List. These penalties are in addition to the $892 million in penalties ZTE has already paid to the U.S government under the March 2017 settlement agreement."
The fine issued in 2016 left the company reeling and its effects were only mitigated in 2017, with the company finally recording profits last year. This new fine will almost definitely have a similar effect, although only an illogical few would argue that it isn’t a more acceptable alternative to the trade ban.
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