In a July 13, 2018 press release, the Commerce Department announced it had lifted the denial order on Zhongxing Telecommunications Equipment Corporation, of Shenzhen, China (ZTE Corporation) and ZTE Kangxun Telecommunications Ltd. of Hi-New Shenzhen, China (ZTE Kangxun) (collectively, ZTE). Commerce took this action shortly after ZTE deposited $400 million in escrow at a U.S. bank to provide a form of security that ZTE will comply with its continuing obligations under the June 2018 superseding settlement agreement. The funds in escrow are in addition to the $1 billion paid to the U.S. Treasury last month.

According to the press release, the $1.4 billion paid under the 2018 settlement agreement is in addition to the $892 million in penalties ZTE paid to the U.S government under the original March 2017 settlement agreement. That agreement included a suspended denial order against the company, which the Bureau of Industry and Security (BIS) had activated on April 15, 2018.

The 2018 settlement agreement requires ZTE to retain a team of special compliance coordinators selected by and answerable to BIS for a period of 10 years. The June 2018 agreement again imposed a denial order that is suspended, this time for 10 years, and BIS can activate it in the event of additional violations during the ten-year probationary period. Pursuant to the 2018 agreement, ZTE has also replaced the entire board of directors and senior leadership for both entities.