The US on Friday formally lifted a crippling ban on exports to China’s ZTE Corp (中興通訊), rescuing the smartphone maker from the brink of collapse after it was denied key components.
The US Department of Commerce said that it would continue to monitor the company to prevent further violations of US sanctions on Iran and North Korea.
“While we lifted the ban on ZTE, the department will remain vigilant as we closely monitor ZTE’s actions to ensure compliance with all US laws and regulations,” US Secretary of Commerce Wilbur Ross said in a statement.
However, the move to reverse the harsh penalties, made at US President Donald Trump’s insistence, has left US lawmakers irate.
The US Congress has taken steps to keep the ban in place and accused Trump of rewarding a company that repeatedly flouted US law, lied to authorities and engaged in espionage.
The about-face to rescue the company created a stark contrast with the escalating trade war between Washington and Beijing.
The department in April banned US companies from supplying ZTE with crucial components, forcing it to halt operations, after officials found further violations, even after reaching a settlement in March last year over the initial complaints.
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However, as a favor to Chinese President Xi Jinping (習近平), Trump ordered the department to ease the penalties on ZTE.
In an agreement struck last month, Washington agreed to lift the export ban if ZTE paid an additional US$1 billion fine — beyond the US$892 million penalty imposed last year.
The company was also required to replace its board of directors, retain outside monitors and put US$400 million in escrow to cover any future violations — a final step that it took this week.
US Senator Mark Warner, the senior Democrat on the US Senate Select Committee on Intelligence, lambasted the reversal in a statement this week, saying that the US military and spy agencies have 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 Iran and North Korea with a slap on the wrist,” Warner said.
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