ZTE replaces its top executives and board to comply with Trump administration deal
The latest news in the long running ZTE saga has the company complying with a list of demands agreed to by the company and the Trump administration so that the crippling U.S. export ban could be lifted. The ban prevented the company from obtaining approximately a third of the hardware, software and components used by the company to produce a smartphone.
ZTE has already paid a $1 billion fine, and has agreed to place $400 million in escrow to cover any future misdeeds by the Chinese manufacturer. In addition, the company agreed to allow a U.S. team to be embedded inside it to monitor the firm's compliance with U.S. prescribed punishments; its failure to comply with the Commerce Department's disciplinary actions after selling goods and services to Iran and North Korea is why ZTE is in this position in the first place.
Another part of the agreement with the current administration requires ZTE to replace its Board of Directors and top executives. The former all resigned and a new eight-person Board is in place. The company's new CEO is Xu Ziyang, who had headed up ZTE's German division. The manufacturer also reached within the company for its new CFO, CTO, and HR chief.
According to the Wall Street Journal, as of yesterday, the export ban is still in place. Before the July 4th holiday, the Commerce Department said that it would allow certain U.S. companies to work with ZTE until the end of this month. There also is the question of an amendment added to a defense-related bill, which passed through the Senate. The amendment calls for the export ban to remain in effect. The House's version of the bill does not contain that amendment, so it remains to be seen whether the attempt to legislate a death sentence for ZTE will make it to the White House. If it does, it surely would be vetoed by the president.
source: WSJ
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