Investors wipe $3-billion off ZTE’s market value after US penalties

Investors wipe $3-billion off ZTE’s market value after US penalties

However, the corporation would have to pay $1 billion in penalties, adding another $400 million in escrow in order to cover possible future fines.

In April, the White House announced a seven-year ban on the company buying USA parts after it said the company violated US sanctions on trade with Tehran and Pyongyang.

In its statement late Tuesday, ZTE said it will "assess the full impact" of the ban and the new deal with the U.S. government and disclose it in an update earnings release.

In a statement to reporters, amendment co-sponsor Sen.

After it was exposed that ZTE violated US trade embargoes and directly lied to officials about the conduct, the Commerce Department banned USA exports to the company as punishment.

The telecom company is considered by the intelligence community to be a mechanism for espionage by, in part, selling phones in the US that can be tracked and enabled to steal intellectual property. That sanction was put in place after the Chinese company violated the terms of an earlier agreement to punish it for illegal sales to Iran and North Korea.

Senators plan to add a provision in the National Defense Authorization Act (NDAA), an annual defense policy bill they're expecting to pass this week, that will ban U.S. suppliers from selling to ZTE, reported The Wall Street Journal.

Senators in support of the original deal also think that it is unrealistic for US officials to police ZTE's future actions, as the Chinese company could still conduct improper business even under a watchful eye.

The reaction to the move, as NPR's Dustin Dwyer reported, was "swift, negative and bipartisan".

In February, U.S. intelligence officials warned Americans not to use smartphones made by ZTE or Huawei - another Chinese telecom company - as the communication technology could be compromised "to gain positions of power inside our telecommunication networks that provides the capacity to exert pressure or control over our telecommunications infrastructure". Tom Cotton, R-Ark., said. He said the threat posed by the mobile phone giant and its rival, Huawei, "is too great to ignore".

"Great news! Our bipartisan amendment restoring penalties on #ZTE is included in the #NDAA bill the Senate will be advancing to later this evening", Senator Marco Rubio said in a Twitter post. "And we'll tackle it this week".

Visitors pass in front of the Chinese telecom giant ZTE booth February 26 at the Mobile World Congress in Barcelona.

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