China and the US have reportedly agreed on the broad outline of an agreement to overturn the US ban on ZTE importing US components and allow the Chinese vendor to get back in business.
According to a Wall Street Journal report, the proposed settlement would involve ZTE agreeing to make major management and board changes and to pay potentially significant additional fines.
The report cites unnamed sources as stating that the two sides are moving closer to settling their ongoing trade dispute.
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ZTE was recently banned from importing US components including the chips and Android operating system it relies on for many of its products for seven years, after the vendor was accused of flaunting the terms of a settlement agreement related to its alleged role in violating US sanctions on Iran.
The vendor had previously agreed to pay large fines and penalize the executives involved in a decision to sell telecoms equipment to Iran in violation of these sanctions. But the Department of Commerce subsequently accused ZTE of failing to sanction the executives, instead granting them large bonuses.
As a result of the ban, ZTE was forced to suspend major operations earlier this month. But in a surprise move, US president Donald Trump tweeted that he plans to intervene to get ZTE back in business due in part to the large number of Chinese jobs on the line.
But a settlement is not a guarantee, as a US bipartisan congressional committee has reportedly voted overwhelmingly to amend legislation that would limit the president's ability to lift the penalties imposed on ZTE.
Trump himself has also denied that he has reached a deal with Chinese president Xi Jinping on the fate of ZTE.
Finally, according to a Bloomberg report, ZTE is projecting losses of at least 20 billion yuan ($3.1 billion) from the import ban.
But according to unnamed sources quoted in the report, ZTE has a plan to be able to get its idle factories back into action within hours of the US agreeing to lift the seven-year ban.