The ban, which has prevented ZTE from buying the United States components it relies on to make smartphones and other devices, will not be lifted until ZTE pays a fine and places $400 million more in an escrow account in a U.S. -approved bank.
Chinese telecommunications giant ZTE Corp had about $3 billion wiped off its market value as it resumed trade on Wednesday after agreeing to pay up to $1.4 billion in penalties to the USA government. On Wednesday in Hong Kong, they nosedived 40% to their lowest level in more than a year.
The benchmark Shanghai Composite Index gave up 0.97 per cent, or 30.00 points, to 3,049.80 and the Shenzhen Composite Index, which tracks stocks on China's second exchange, dropped 1.58 per cent, or 27.73 points, to 1,731.43.
The $400 million will be held in a US bank account for 10 years and can be disbursed to the Commerce Department if ZTE fails to abide by the agreement.
The U.S. Commerce Department can exercise discretion in granting exceptions.More news: House vote still looms at Net Neutrality comes to an end
More news: Sea of Solitude is About The Monstrous Effects of Being Lonely
More news: Come watch Square Enix's E3 2018 showcase with us!
Ross was planning to brief senators on the ZTE deal Monday, Senate Majority Whip John Cornyn said.
Under the settlement, ZTE will pay a total civil penalty of $1.7 billion, including $361 million already paid as part of a March 2017 agreement, the $1 billion fine and the $400 million that will go into escrow. The department also will select a monitor, known as a special compliance coordinator, within 30 days to report on compliance by ZTE and its affiliates worldwide for 10 years. "The new governance structure will pose challenges for the company's management in the future", Zhongtai Securities said in a note.
Shares resumed trading following a two-month suspension after Washington accused state-owned ZTE in April of reneging on a settlement of charges it violated export rules by selling US technology to Iran and North Korea. Its Shenzhen shares fell by their 10 per cent limit to 28.18 yuan after it confirmed details of the agreement publicized by the USA government on Monday.
The ban forced ZTE to suspend major operations, and trading in its shares in were halted on 17 April. This issue has become one of the key problems in a trade war between the two countries. In addition, within 180 days, ZTE must post calculations of the US components in its products on its website in Chinese and English. North Korea is largely dependent on economic ties with China, where leaders had claimed that absent a ZTE deal, the telecom giant would collapse.