If approved, the bill would ask the government to inform about progress in ZTE’s compliance deal
Republican and Democratic senators have introduced a bill that aims to re-impose sanctions on Chinese vendor ZTE if the firm fails to fully comply with U.S. laws and an agreement with the Trump administration that ended a seven-year export ban against the firm, Reuters reported.
The bill, which is led by Republican Senator Marco Rubio and Democrat Chris Van Hollen, is likely to obtain support from congressional leadership, Reuters said, citing Senate aides.
Senate aides said that the main goal of the proposed bill is to show that the U.S. Congress wants a strong punishment if ZTE violates the terms of the deal with the government. The bipartisan legislation would require reports from the Department of Commerce every three months on ZTE’s compliance with the agreement, and sharing ZTE audits conducted under the deal with congressional committees.
If the Chinese vendor fails to comply with the deal, it will face penalties, including paying $400 million now held in escrow.
“This bipartisan legislation would ensure that if ZTE once again violates trade restrictions or its agreement with the U.S., it will be held accountable in a significant, painful way,” the report quoted Senator Mark Warner, one of the co-sponsors of the bill, as saying.
The seven-year export ban was imposed by the Department of Commerce’s Bureau of Industry and Security (BIS) in March this year, after it found that ZTE had violated sanctions the U.S. had imposed on Iran and North Korea.
In early May, ZTE ceased its major operating activities due to the ban, which did not allow U.S. firms to ship key components, including chips, to ZTE.
In June, the Trump administration reached a deal with China to ease the penalties, allowing ZTE to resume business. On July 13, Secretary of Commerce Wilbur Ross announced that ZTE had placed $400 million in escrow at a U.S. bank. Shortly after the deposit, the department lifted the denial order on ZTE. The escrow funds are in addition to the $1 billion penalty imposed by Commerce that ZTE paid to the U.S. Treasury.
The U.S. Department of Commerce recently appointed Roscoe Howard Jr. to be the special compliance coordinator (SCC) for ZTE, to coordinate, monitor, assess, and report on compliance with U.S. export control laws. The Department of Commerce has said that the coordinator will operate with unprecedented access across the company.
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