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The US ban on ZTE has been temporarily lifted

Published Jul 3rd, 2018 5:21PM EDT
ZTE Ban lifted
Image: Fernandez/AP/REX/Shutterstock

It’s been a rollercoaster few weeks for ZTE, one of China’s biggest telecommunications firms. First, the company was slapped with a seven-year ban for its actions evading US sanctions on North Korea and Iran. The ban was thrown into doubt as President Trump suggested on Twitter that it would be lifted, only for lawmakers in Congress to kick back against that idea.

For now, it seems that ZTE and the White House are winning. The Trump administration is allowing ZTE to resume some business in the US while it weighs a final decision on the ban.

ZTE’s temporary authorization comes in the form of a waiver from the Commerce Department’s Bureau of Industry and Security, and allows the firm to conduct some business in the US until August 1st. By that point, ZTE is expected to be in compliance with US requests, which will enable the permanent lifting of the ban.

ZTE plead guilty to conspiring to violate US sanctions against Iran and North Korea in a US court last year. Under the terms of its guilty plea, ZTE paid $890 million in fines, and agreed to fire some senior staff, and strip bonuses from 35 others.

According to a Commerce Department filing from April, ZTE never reprimanded its 35 lower-level employees, and worse, it made false statements to the Department about its compliance. As a result, the Commerce Department enacted a seven-year sanction on ZTE, which was part of the initial guilty plea but suspended, pursuant to ZTE carrying out the other steps it promised.

“Instead of reprimanding ZTE staff and senior management, ZTE rewarded them. This egregious behavior cannot be ignored,” Secretary of Commerce Wilbur Ross said in a press release at the time.

ZTE is one of the biggest Android manufacturers in China, and a significant player on the global market. It has a small but rising share of the smartphone business in the US. As a company, the bulk of its profits are in network telecommunications devices, but smartphones are the majority of its consumer business.