Original English text:ZTE and U.S. still working on escrow agreement: U.S. official
Netease Technology News, June 20, according to Reuters, an American official told Reuters on Tuesday that ZTE and the U.S. government are still working on a escrow agreement. Before lifting the ban on ZTE's trade, the agreement must be finalized and the $400 million of custody funds deposited into the designated bank account.
The U.S. Department of Commerce official said on condition of anonymity that the establishment of a custody agreement is part of the "regular procedure."
As part of the settlement agreement reached with the U.S. Department of Commerce on June 7 this year, ZTE agreed to pay the latter a fine of US$1 billion and deposit US$400 million in a escrow account of a U.S. bank, thereby recovering the U.S. supplier’s Business dealings.
The purpose of setting up this escrow account is to allow the United States to obtain this fund in the event of ZTE breaching the settlement agreement. The escrow agreement will determine the terms on which ZTE deposited the funds, and the conditions under which the funds can be released.
According to informed sources, ZTE paid a civil fine of US$1 billion last week.
The ZTE spokesman did not immediately respond to requests for comment.
ZTE last month said that after the U.S. Department of Commerce issued a sales ban that prohibits U.S. companies from supplying parts for ZTE’s smartphones and network equipment, the company has stopped its main business.
The basis for the US Department of Commerce to issue the sales ban stated that it discovered that ZTE had made a false statement that it had penalized 35 employees involved in the illegal delivery of U.S. products to Iran, and that by obscuring the facts, the company realized in March 2017. Reconciliation with the U.S. Department of Commerce.
According to the March 2017 settlement agreement, ZTE paid civil and criminal penalties of US$892 million and pleaded guilty in the federal court of Texas to this illegal activity.
ZTE, headquartered in Shenzhen, has a subsidiary in Richardson, Texas. (Liu Chun)