The US has reached a billion-dollar settlement with ZTE to lift the crippling sanctions against the Chinese smartphone maker, angering some US lawmakers.
Under the agreement, ZTE will pay the US government a $1.4 billion penalty and replace the company's leadership with a new team. The US Commerce Department is also appointing watchdog officers to monitor ZTE's compliance with US export laws for the next decade. Any violation can let the US reimpose sanctions.
In a statement, the Commerce Department said the actions represent the "most severe penalty" it's ever handed down. However, the agreement is facing backlash from several US lawmakers, who claim that ZTE and its telecommunication gear are a national security threat.
"The President just caved on a deal with ZTE, a Chinese company that our intelligence professionals say poses a national security threat," Rep. Adam Schiff (D-Calif.) tweeted.
"This 'deal' with #ZTE may keep them from selling to Iran and North Korea," tweeted Sen. Marco Rubio (R-Florida) on Thursday. "That's good. But it will do nothing to keep us safe from corporate and national security espionage. That is dangerous. Now Congress will need to act to keep America safe from #China."
US Commerce Secretary Wilbur Ross defended the new agreement, saying in a statement: "We will closely monitor ZTE's behavior. If they commit any further violations, we would again be able to deny them access to US technology."
A key concern is ZTE's ties to the Chinese government. In 2012, a Congressional committee urged US businesses to avoid buying telecommunication gear from ZTE over fears the Chinese government could compel it to secretly spy on Americans.
Last year, ZTE agreed to pay a then-record civil and criminal penalty of $1.19 billion for selling technology to North Korea and Iran, two countries on the US sanctions list. As part of that deal, ZTE had to fire or discipline a number of its employees, something it did not do the Americans' satisfaction. As a result, the US in March banned US companies from selling components to ZTE for seven years, forcing the Chinese vendor to halt "major operating activities," putting its future in peril.
But despite that action, President Trump tweeted last month that he was working with China's President Xi to give ZTE "a way to get back into business, fast." The Commerce Department's ban, he wrote, had resulted in "too many jobs...lost" and said he'd instructed Commerce "to get it done."
Since then, it's been up in the air as to what that actually meant; ZTE has not yet commented on today's deal.