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. It will also have to replace its management board.
Bipartisan critics of the deal wonder whether striking a deal with ZTE - which national security officials warned posed an intelligence risk - sends a signal that Trump is too lax on companies that won't comply with US -mandated sanctions.
All members of ZTE's leadership at or above the senior vice president level also must be terminated, along with any executive or officer tied to the wrongdoing.
White House trade adviser Peter Navarro on Sunday likened the deal to "three strikes you're out", referring to two prior violations ZTE committed under the sanctions agreement with the U.S.
The U.S. Commerce Department can exercise discretion in granting exceptions. Tom Cotton (R-Ark.), one of the chief authors of the amendment. The coordinator will have a staff of at least six employees funded by ZTE.
The fear among USA intelligence agencies is that Chinese telecom equipment makers such as ZTE and Huawei pose a threat to national security, with even leaders of organisations including the NSA and Federal Bureau of Investigation concerned that ZTE and Huawei could be using their devices and equipment to spy on Americans.
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Hong Kong's benchmark Hang Seng index.HSI was down 0.5% in early trade.
Republicans, who control both chambers of Congress, and Democrats expressed national security concerns about ZTE after it broke an agreement to discipline executives who had conspired to evade USA sanctions on Iran and North Korea.
ZTE, with a market value of around $20 billion before its shares were suspended in April, is the world's fourth-largest telecom equipment maker after Huawei Technologies, Ericsson and Nokia.
ZTE said Tuesday it will resume operating activities affected by the ban "as soon as practicable".
The ban was placed on ZTE to punish it for violating USA sanctions.
ZTE, which is based in Shenzhen, is China's second biggest telecoms maker.