The technology coming from China has been under the focus of Donald Trump and the main US intelligence agencies for a long time. Accused of participating with the Chinese government, the main international brands have suffered the effects of another the economic embargo. ZTE has been one of the most affected companies but is close to signing an agreement to continue its collaborations with US-based technology companies, such as Qualcomm.
Recently, ZTE has signed a preliminary agreement that would lift the ZTE ban imposed by the US Department of Commerce that prevented US companies from buying electronic components from Chinese suppliers.
A measure that would allow ZTE to return to the US market after the punishment imposed by the US government. However, the agreement has not yet been signed by both parties.
This blockade has been very detrimental to ZTE, the second largest manufacturer of telecommunications equipment in the North American market.
The firm ceased its seven years operations on the US market after the US government accused ZTE, in April, for violating a 2017 agreement after selling components to Iran and North Korea, two regions vetoed by the US government.
The new agreement between ZTE and the US governments will have a couple of conditions
The agreement includes a $1 billion penalty for ZTE and another $400 million in trust to cover future possible violations.
The US Department of Commerce will take into account the $361 million paid by the company last year, which will allow the US to claim a $1.7 billion fine.
As part of the agreement, ZTE has promised to replace its current board of directors and executive team within thirty days and will allow the company periodic inspections to verify that the locally manufactured components are being used as agreed.
US companies, especially Qualcomm, provide 25 to 30 percent of the components for the equipment manufactured by ZTE, including smartphones and equipment for building telecommunication networks.