ZTE reaches escrow deal with U.S.: Reuters

Reuters reports that ZTE has reached a deal with the U.S. Department of Commerce on the financial escrow portion of the requirements necessary to lift the ban on ZTE’s access to U.S. technology (see “ZTE must disclose Chinese government stake as part of new agreement”). The report comes after the South China Morning Post reported that ZTE officials were in Washington, DC, to meet with Commerce Department officials in hopes of achieving such an outcome.

Update: The Commerce Department has confirmed a deal has been reached.

Our statement on #ZTE and the escrow agreement: pic.twitter.com/w0Bbej1mAU

— U.S. Commerce Dept. (@CommerceGov) July 11, 2018

Deposit of $400 million in escrow and payment of a $1 billion fine were the two primary requirements ZTE had to meet to see the ban lifted. Additional stipulations to ensure the ban remained in check included replacement of the company’s board and all executives above the level of senior vice president. The company has embarked on the personnel changes (see “ZTE names new board per Commerce Department agreement”). The company’s newly appointed CEO, Xu Ziyang, led the ZTE delegation to Washington, according to the South China Morning Post.

The deal signals that ZTE may see the ban lifted soon. The company has already seen restrictions loosened slightly (see “Department of Commerce eases ZTE restrictions”). However, Congress must still address language in the Senate version of a defense appropriations bill that would reimpose the ban.

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