US lifts ZTE ban, allowing Chinese telecoms company to resume business
The US has lifted a nearly three-month ban on ZTE that had crippled the Chinese telecommunications giant after it violated American trade laws. The move came at the urging of US President Donald Trump, and despite opposition from US lawmakers concerned about threats to national security.
The removal of the ban by the US Commerce Department on Friday allows China's second largest telecoms equipment maker to resume buying American electronic parts that are crucial to its products.
"While we lifted the ban on ZTE, the department will remain vigilant as we closely monitor ZTE's actions to ensure compliance with all US laws and regulations," Commerce Secretary Wilbur Ross said in a statement on Friday.
The move came amid an escalating trade dispute between the world's two largest economies, and observers say the case may be a possible bargaining chip in the broader trade negotiations.
Domestically, a battle continues between the US Congress and the White House over how to deal with ZTE as lawmakers push for harsher penalties because of national security concerns. A bipartisan group of six US senators made another effort on Thursday to reinstate the ban.
US Commerce Secretary Wilbur Ross (shown in May) says his agency 'will remain vigilant as we closely monitor ZTE's actions'. Photo: Getty Images/AFP
They said in a letter to the Senate and House Armed Services Committee chairmen that ZTE, along with Huawei, another telecoms giant, "are beholden to the Chinese government and Communist Party, which provides the capacity for espionage and intellectual property theft, and therefore poses clear threats to the national security, people, and economy of the United States".
Ross said on Friday that "three interlocking elements " a suspended denial order, the US$400 million in escrow, and a compliance team selected by and answerable to the department " will allow the department to protect US national security".
The compliance coordinators will report to the Commerce Department's Bureau of Industry and Security (BIS) for 10 years, according to the statement.
On Friday, ZTE said it expected to record a net loss in the first half of the year because of the US$1 billion fine it paid last month to have the ban lifted.
This article originally appeared on the South China Morning Post (SCMP).
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