ZTE back in business within days after signing agreement with US government

ZTE close to lifting US 'denial order' that brought production lines juddering to a halt

ZTE, the Chinese communications hardware company borked when the US government instituted a trade embargo, could be back in business within days after a new agreement with the US government was signed.

The new deal will enable the company to resume purchasing key components from US suppliers once certain conditions are met, enabling it to restart production lines following a two-month hiatus.

ZTE now needs to deposit $400 million in an escrow account as one of the final parts of its deal with the US Department of Commerce, after it paid up a $1 billion fine and replaced its board of directors. The final hurdle will be to present a sales compliance board acceptable to the Department.

"We are literally embedding a compliance department of our choosing into the company to monitor it going forward," Commerce Secretary Wilbur Ross told CNBC at the beginning of June when the draft deal was first thrashed out.

According to Bloomberg, ZTE's losses will be "at least $3 billion" following the embargo, implemented in April. Within a month, supplies of key components had dried up and ZTE was forced to halt its production lines.

"Once the monitor is selected and brought on board, the three-pronged compliance regime - the new 10-year suspended denial order, the $400 million escrow, and the monitor - will be in place," the US Department of Commerce said in the statement.

It continued: "The ZTE settlement represents the toughest penalty and strictest compliance regime the Department has ever imposed in such a case. It will deter future bad actors and ensure the Department is able to protect the United States from those that would do us harm."

The US Department of Commerce embargo (or "denial order") on ZTE was imposed on 16 April after it accused ZTE of reneging on a March 2017 settlement for busting sanctions on Iran and North Korea.

Under the terms of that settlement, ZTE had pledged to fire the executives responsible for approving the sales, but the US Department of Commerce claims ZTE didn't act until after the Department had highlighted its non-compliance.

The deal empowered the Department to institute a seven-year trade ban on ZTE should it be found non-compliant.