China’s ZTE expected to take last step to lift ban

BEIJING: ZTE Corp is expected to deposit $400 million in an escrow account in a U.S. bank in the "next couple of days," the last step the Chinese company must take before a ban on U.S. suppliers can be lifted, a U.S. Department of Commerce official told Reuters on Friday.

ZTE, which makes smart phones and networking gear, agreed to pay a $1 billion penalty and put $400 million in escrow as part of a settlement it reached on June 7 with the Commerce Department to regain access to the U.S. market, which it needs for components.

ZTE, China´s second-largest telecommunications equipment maker, ceased major operations after the United States imposed the ban in April.

The company had broken a prior agreement, the Commerce Department said, by making false statements about disciplining executives involved in illegally shipping U.S. goods to Iran and North Korea, which are subject to U.S. sanctions themselves, that led to nearly $900 million in civil and criminal penalties to U.S. authorities last year.

The escrow account in the new settlement is designed to allow the U.S. government access to the $400 million if ZTE violates the latest deal.

An escrow agreement, which defines the conditions under which the money could be released, was in the process of being finalized, sources told Reuters on Friday.