(FinancialPress) — The deal that chinese phonemaker ZTE and the Trump administration reached has not pleased everyone.
The state-controlled Chinese smartphone manufacturer had been banned from trading tech and services with American companies after it breached a 2017 agreement. The agreement in question was meant to have the company comply with sanctions imposed by the US on North Korea and Iran.
However, the ban will be lifted after hefty negotiations. ZTE has agreed to pay a $1 billion fine and to comply with the sanctions from here on out – as well as replace its entire board of directors and corporate leadership.
The deal has one more striking provision – an American-appointed oversight team will work on-site at the company to ensure their compliance. Chinese experts were taken aback by the point in question, and many are unsure about how such an agreement could move forward.
Scott Kennedy, director of the Project on Chinese Business and Political Economy at the Center for Strategic and International Studies said that it, to him, “seems like an aspirational goal. I can see this one getting dragged out.”
The escrow in the room
Additionally, $400 million of ZTE money will be required to be in an escrow account. The money will be forfeited if further agreement breaches are detected, and the ban will be effective once more.
ZTE still has not emitted official comment on the deal yet.