White House has deal to lift sanctions on China's ZTE: report

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Washington (AFP)

The White House says it has reached a deal with Chinese telecoms giant ZTE that would lift crippling sanctions slapped on the company, The New York Times reported Friday.

The news comes as the US prepares to send a trade delegation back to Beijing next week to continue talks aimed at defusing a potentially serious trade dispute with China, after the countries exchanged huge tit-for-tat threats on imports.

The reported terms of the ZTE deal closely match the conditions US President Donald Trump and Commerce Secretary Wilbur Ross described earlier this week as a means for the firm to escape the export ban that nearly shuttered its operations.

However, it seemed likely to provoke a harsh reaction in Congress, as lawmakers have been critical of the administration for signaling it might ease the pressure on a company that violated US sanctions on Iran and North Korea and repeatedly lied to US officials.

ZTE was fined $1.2 billion in March 2017, but last month Washington banned the sale of crucial US components to the company after finding it had lied multiple times and failed to take actions against employees responsible for sanctions violations.

Under the new deal brokered by the Commerce Department, according to the Times, ZTE would pay a substantial fine, hire American compliance officers to be placed at the firm and make changes to its current management team.

Even while US officials said the ZTE penalties were a national security issue separate from the trade talks with Beijing, Trump said Tuesday he was looking at easing the tough sanctions on ZTE "as a favor" to Chinese President Xi Jinping.

Trump said he envisioned a new fine on the company of as much as $1.3 billion as well as a management shake-up and strict new rules.