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US government is temporarily lifting ban on ZTE

The ban on ZTE has been partially lifted till the end of the month

  • Published: July 4, 2018 11:45 AM IST
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The American government has partially lifted the ban it had issued on ZTE in April. Under the temporary authorization, ZTE can continue to do business with its suppliers, while the Congress continues to weigh penalties on the company. This should allow ZTE to keep some of its infrastructure running for the time being, which is good news for the Chinese company, as it was almost on the verge of shutting down two months ago.

The ban release will come into effect immediately and will be valid till the end of the month. With the temporary authorization, ZTE can continue doing business with its US suppliers and get the much-needed support in hardware and software. This will further help the company provide the necessary services to its phones, which includes updates and security patches. It is mostly targeted towards the company providing support for the phones that it has already sold.

In April, ZTE was banned from the United States for seven years for violating a US trade law by selling its devices to Iran and North Korea. Under the ban, ZTE had been prohibited from buying components from American suppliers. However, the ban was said to be reconsidered when US President Donald Trump personally urged the lawmakers to go easy on the company. According to him, removing the ban on ZTE, would help his negotiation strategy against China.

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That said, ZTE’s fate is still unclear. However, a Bloomberg report states the entire ban to be lifted by the end of the month. There is good chance that the government might impose additional fines on the company though. At the moment, ZTE has been asked to pay $1.4 billion (approximately Rs 9,600 crore) in fine, out of which the company has paid $1 billion (approximately Rs 6,800 crore), with the remaining $400 million (approximately Rs 2,700 crore) being setup up as a bond to cover for future violations.

  • Published Date: July 4, 2018 11:45 AM IST