The United States Commerce Department has lifted the ban from ZTE and allowed it to resume its business activities again after the latter paid the final installment of the $1.4 billion fine that was imposed on it.
ZTE had previously deposited $892 million in an escrow account in a U.S. bank after it pleaded guilty to violating the sanctions imposed on it by the U.S. government.
The U.S. Department of Commerce imposed an import ban on ZTE that prevented any U.S company from dealing with it. This essentially brought ZTE’s business operations to a halt as despite being a Chinese smartphone company, it sourced the majority of the components for its smartphones from that of U.S. companies. Before the ban, ZTE was the fourth-largest smartphone vendor in the unlocked smartphone market of the United States.
The ban was imposed on the company after it pleaded guilty for violating the sanctions imposed by the U.S. government back in 2017 after it was caught selling parts acquired from U.S. companies to Iran and North Korea. The ban was imposed for a period of seven years which led ZTE to announce that it was ceasing its global operations.
The Chinese government had demanded that the U.S. remove the import ban on ZTE during their ongoing trade war discussions.
In a bid to remove the ban, ZTE fired its entire board and has appointed a new chairman. However, despite the ban removed, ZTE faces an uphill battle. This is because it now has to not only rebuild its image and business relations with consumers and other companies, but its management also needs to see how the company tides through the $3 billion loss that it has faced due to its global business operations being ceased for over a month.[Via Bloomberg]