The United States and China have reached a deal that allows the Chinese telecommunications giant ZTE Corp. to stay in business in exchange for paying an additional $1 billion in fines and agreeing to let U.S. regulators monitor its operations.
FILE- In this Feb. 26, 2014, file photo, a sign for the ZTE booth is seen at the Mobile World Congress, the world's largest mobile phone trade show in Barcelona, Spain. The United States has reached a deal with the Chinese telecommunications giant that includes a $1 billion fine, according to Commerce Secretary Wilbur Ross. Ross, speaking on CNBC on Thursday, June 7, 2018 said that a compliance team picked by the U.S. will be embedded at ZTE. (AP Photo/Manu Fernandez, File)
The fine announced Thursday comes on top of $892 million ZTE has already paid for breaking U.S. sanctions by selling equipment to North Korea and Iran. The Commerce Department said that ZTE must also put $400 million in escrow — a sum that it would forfeit if it violated Thursday's agreement.
In addition, a compliance team chosen by the United States will be embedded at ZTE and the Chinese company must change its board and executive team.
President Donald Trump has drawn fire from Congress for intervening in the case to rescue a Chinese company that had violated U.S. sanctions against two rogue nations that have been pursuing nuclear weapons programs.
"ZTE is essentially on probation," said Amanda DeBusk, chair of the international trade and government regulation practice at Dechert LLP and a former Commerce official. "It's unprecedented to have U.S. agents as monitors ... It's certainly a good precedent for this situation. ZTE is a repeat offender."
In April, the Commerce Department barred ZTE from importing American components for seven years, having concluded that it deceived U.S. regulators after it settled charges last year of sanctions violations: Instead of disciplining all employees involved, Commerce said, ZTE had paid some of them full bonuses and then lied about it.
The decision amounted to a death sentence to ZTE, which relies on U.S. parts and which announced that it was halting operations. The ban also hurt American companies that supply ZTE.
Trump barged into the ZTE case last month by tweeting that he was working with President Xi Jinping to put ZTE "back in business, fast" and save tens of thousands of Chinese jobs. He later tweeted that the ZTE talks were "part of a larger trade deal" being negotiated with China.
Trump has drawn criticism from members of Congress for going easy on the Chinese company. Democratic Sen. Chuck Schumer of New York immediately responded to Thursday's announcement: "Despite his tough talk, this deal with ZTE proves the president just shoots blanks."
Still, the resolution of the ZTE case may clear the way for the United States to make progress in its trade talks with China. The two countries have threatened to impose tariffs on up to $200 billion worth of each other's products in a dispute over China's tactics to supplant U.S. technological supremacy, including demands that U.S. companies hand over trade secrets in exchange for access to the Chinese market.
Thursday's agreement was "a prerequisite for making broader progress," DeBusk said. "The ZTE case was a thorn in the side for China ... For the U.S. to shut down one of China's largest companies is a very dramatic type of move. It certainly got their attention."
KYIV, Ukraine (AP) — A Ukrainian court on Friday ordered the detention of the country’s farm minister in the latest high-profile corruption investigation, while Kyiv security officials assessed how they can recover lost battlefield momentum in the war against Russia.
Ukraine’s High Anti-Corruption Court ruled that Agriculture Minister Oleksandr Solskyi should be held in custody for 60 days, but he was released after paying bail of 75 million hryvnias ($1.77 million), a statement said.
Ukraine’s National Anti-Corruption Bureau suspects Solskyi headed an organized crime group that between 2017 and 2021 unlawfully obtained land worth 291 million hryvnias ($6.85 million) and attempted to obtain other land worth 190 million hryvnias ($4.47 million).
Ukraine is trying to root out corruption that has long dogged the country. A dragnet over the past two years has seen Ukraine’s defense minister, top prosecutor, intelligence chief and other senior officials lose their jobs.
That has caused embarrassment and unease as Ukraine receives tens of billions of dollars in foreign aid to help fight Russia’s army, and the European Union and NATO have demanded widespread anti-graft measures before Kyiv can realize its ambition of joining the blocs.
In Ukraine's capital, doctors and ambulance crews evacuated patients from a children’s hospital on Friday after a video circulated online saying Russia planned to attack it.
Parents hefting bags of clothes, toys and food carried toddlers and led young children from the Kyiv City Children’s Hospital No. 1 on the outskirts of the city. Medics helped them into a fleet of waiting ambulances to be transported to other facilities.
In the video, a security official from Russian ally Belarus alleged that military personnel were based in the hospital. Kyiv city authorities said that the claim was “a lie and provocation.”
Kyiv Mayor Vitali Klitschko said that civic authorities were awaiting an assessment from security services before deciding when it was safe to reopen the hospital.
“We cannot risk the lives of our children,” he said.
Meanwhile, Ukrainian President Volodymyr Zelenskyy was due to hold online talks Friday with the Ukraine Defense Contact Group, which has been the key international organization coordinating the delivery of weapons and other aid to Ukraine.
Zelenskyy said late Thursday that the meeting would discuss how to turn around Ukraine’s fortunes on the battlefield. The Kremlin’s forces have gained an edge over Kyiv’s army in recent months as Ukraine grappled with a shortage of ammunition and troops.
Russia, despite sustaining high losses, has been taking control of small settlements as part of its effort to drive deeper into eastern Ukraine after capturing the city of Avdiivka in February, the U.K. defense ministry said Friday.
It’s been slow going for the Kremlin’s troops in eastern Ukraine and is likely to stay that way, according to the Institute for the Study of War. However, the key hilltop town of Chasiv Yar is vulnerable to the Russian onslaught, which is using glide bombs — powerful Soviet-era weapons that were originally unguided but have been retrofitted with a navigational targeting system — that obliterate targets.
“Russian forces do pose a credible threat of seizing Chasiv Yar, although they may not be able to do so rapidly,” the Washington-based think tank said late Thursday.
It added that Russian commanders are likely seeking to advance as much as possible before the arrival in the coming weeks and months of new U.S. military aid, which was held up for six months by political differences in Congress.
While that U.S. help wasn’t forthcoming, Ukraine’s European partners didn’t pick up the slack, according to German’s Kiel Institute for the World Economy, which tracks Ukraine support.
“The European aid in recent months is nowhere near enough to fill the gap left by the lack of U.S. assistance, particularly in the area of ammunition and artillery shells,” it said in a report Thursday.
Ukraine is making a broad effort to take back the initiative in the war after more than two years of fighting. It plans to manufacture more of its own weapons in the future, and is clamping down on young people avoiding conscription, though it will take time to process and train any new recruits.
Jill Lawless contributed to this report.
Follow AP’s coverage of the war in Ukraine at https://apnews.com/hub/russia-ukraine
Ukrainian young acting student Gleb Batonskiy plays piano in a public park in Kyiv, Ukraine, Thursday, April 25, 2024. (AP Photo/Francisco Seco)
