Chinese firm ZTE reaches preliminary agreement with US to restore business: report

Chinese firm ZTE reaches preliminary agreement with US to restore business: report
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ZTE has reportedly reached an agreement in principle with the Trump administration to lift the Department of Commerce’s ban on American companies selling equipment to the Chinese telecommunications giant.

Reuters reported Tuesday that under the preliminary agreement, ZTE would pay a $1 billion fine in addition to another $400 million in an escrow in case it commits future sanctions violations.

The Department of Commerce will also change its 2017 settlement agreement with ZTE, counting the $361 million it has already paid in penalties toward the sum, Reuters reported.

In total, the U.S. will collect $1.7 billion from the Chinese phone company for violating sanctions against Iran and North Korea.

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An agreement in principle is not a final agreement but is a step toward it. Commerce Department spokesman James Rockas told Reuters that “no definitive agreement has been signed by both parties.”

ZTE shut down its operations at the beginning of May following Commerce’s decision to ban it from purchasing equipment from U.S. companies.

The company has been at the center of debate between President TrumpDonald John TrumpPapadopoulos on AG's new powers: 'Trump is now on the offense' Pelosi uses Trump to her advantage Mike Pence delivers West Point commencement address MORE — who has said he wants to ease up on the company — and members of Congress, who see ZTE as a threat to national security.

Lawmakers fear that ZTE's relationship with the Chinese government could give China back-door access to data from Americans and have urged Trump to maintain a hard-line position on the firm.