The U.S. government and Chinese telecoms giant ZTE are hashing out the details of an escrow account that must be settled before a ban on the Chinese firm doing business with U.S. companies is lifted, according to Reuters.
{mosads}A Commerce Department Official who shared details of the ongoing arrangement said this type of escrow agreement is a normal part of such processes.
ZTE has agreed to pay a $1 billion penalty and put another $400 million in an escrow account with a U.S. bank as a part of its arrangement to get the U.S. to lift its ban on the Chinese phone maker purchasing equipment from U.S. businesses.
This ban, which was imposed after Commerce found that ZTE violated U.S. trade sanctions, forced the Chinese company to shut down its operations.
The escrow is set up for the U.S. to withdraw from should ZTE violate the terms of the agreement.
Even as the administration moves forward on the deal, the Senate is trying to shut it down. On Monday, the Senate passed the National Defense Authorization Act which included amendments intended to block President Trump from softening Commerce’s ZTE punishment.
ZTE’s stock took a massive hit after the news of the Senate vote. The company’s share prices dropped by 25 percent on Tuesday.