US to claim $1.7bn penalty from China's ZTE
The administration of US President Donald Trump is reportedly planning to seek a penalty of $1.7 billion from China’s telecommunications major ZTE Corporation.
The move – as revealed by people familiar with the matter – would be meant to punish and tighten control over the company before allowing it back into business.
Reuters said in a report that the US Commerce Department would also seek “unfettered site visits” to verify US components are being used as claimed by ZTE.
One source was also reported as saying that Washington also wanted the Chinese company to replace its board and executive team as soon as 30 days.
Nevertheless, a deal still had not been finalized and the sources cautioned that the
penalties were fluid and the terms could change, Reuters added.
ZTE has been crippled by a ban imposed in April on buying US technology components for seven years for breaking an agreement reached after it was caught illegally shipping goods to Iran and North Korea.
The US accordingly forced the company to pay as much as $1.2 billion in March 2017 for allegedly shipping telecommunications equipment to Iran and North Korea in violation of unilateral American sanctions.
American companies provide an estimated 25 percent to 30 percent of components in ZTE's equipment, which includes smartphones and gear to build telecommunications networks.
The company's status has become an important bargaining chip in high-level trade talks between China and Washington amid reports that if the United States eases up on ZTE, China will buy more American agricultural goods.
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