ZTE Set To Pay $1.7 billion Fine To US government
According to insiders, the Chinese tech giant, ZTE, is planning to pay up $1.7 billion fine after its US trade ban effective April 15. The tech company is estimated to have lost around $3 billion as around 25 to 30% of the hardware it uses is supplied by US companies.
However, this is absolutely a scenario ZTE is anticipating for because the initial 7-year ban would definitely do the company a terrible. Moreover, aside the proposed $1.7 billion fine, the US government insists that ZTE will have to replace its board of directors, executive team and hire a compliance contractor to oversee the company’s operations.
In any case, the ZTE will pay much less – about $1 billion but will be asked to put $400 million in escrow in a US-based bank.
Remarkably enough, some people familiar with the matter claim that ZTE has turned into a token for bargaining – if the US government agrees to settle things with ZTE, China will buy more American-made agricultural goods.