US sets sights on even bigger fine for ZTE, tight timeline for compliance measures
After President Donald Trump outlined what changes the Commerce Department would make to its punishment raft against Chinese tech manufacturer ZTE, sources now say that the company could be in for a slightly rougher replacement to its 7-year US imports ban issued in April.
Reuters reports that the monetary penalty has swelled from $1.3 billion to $1.7 billion. The agency also wants to send compliance monitors to see whether ZTE is using US components and force the company to publicly post the cost of US components in each of its products. Another source says that the US government wants the firm to flush its management and executive arms within 30 days.
The company will also now have to hire a compliance overseer who will join a third-party oversight firm that was brought along in the initial punishment.
These changes, seen as a reprieve for ZTE to allow it to conduct business as usual again, have yet to be finalized.
While ZTE was initially fined $892 million for crossing trade sanctions with business in Iran and North Korea, the company was slapped with a ban in April on purchasing US products after it was found that 35 management figures were not disciplined as part of a settlement. There’s some expectation that the US will allow a portion of ZTE’s penalties to count toward the new figure. However, a suspended penalty of $300 million will now grow to $400 million.