Update of 08/06/2018 at 2:40 p.m.: as revealed by Reuters “in a memo to staff on Friday, ZTE President Yin Yimin apologized to employees, customers, shareholders and business partners and said the manufacturer would seek to learn from its mistakes.” The president of ZTE adds that the incident was caused by poor decisions of some of the company’s executives and employees. An employee of ZTE also stated “paying the fine is not a problem, the real difficulty lies in the future and future business, especially abroad, the confidence of the market is lost”.
The United States lifts sanctions against ZTE, the Chinese smartphone maker, talking about a payment of a total fine of $1.7 billion. A compliance team will also be designated by the United States for a 10-year period to ensure that the manufacturer will no longer sell products to embargoed countries. The manufacturer will once again be able to purchase components from U.S. suppliers.
Illustration: our takeover of ZTE Axon M
According to the tech news site The Verge, ZTE will again be able to resell smartphones following an agreement reached with the U.S. Department of Commerce. As expected, ZTE was fined $1.3 billion and will also have to hand over an additional $400 million to the U.S. government. The financial penalty is particularly heavy. For the record, ZTE was guilty of violating an embargo by selling products to North Korea and Iran. The manufacturer could no longer purchase U.S. components for a period of 7 years as a result of this case.
ZTE officially saved by the United States
That’s not all, our colleagues report that a “compliance” team will be designated by the United States to integrate ZTE for a period of 10 years. It will be responsible for ensuring that the Chinese manufacturer does not violate any more embargoes in the future. Then changes will be made to the management of the company and ZTE has 30 days to appoint new managers. The U.S. Department of Commerce says this is the first time such strict measures have been taken against a company.
The U.S. president has been very involved in this matter. Donald Trump reportedly indirectly received $500 million from China before deciding to save the automaker. There is talk of building a huge amusement park near Jakarta, Indonesia. This project focuses on the establishment of hotels, residences, etc. The president’s companies have a lot to gain from this case. Not to mention that the ZTE bailout decided by Donald Trump was announced only three days later.
In any case, ZTE will once again be able to purchase American components, including Qualcomm’s famous SoC, and resell its smartphones. Share your thoughts in the comments regarding the outcome of this case with the site community.
