The U.S. Department of Commerce on July 13 lifted a ban on U.S. companies selling equipment to Chinese telecom giant ZTE, allowing the company to resume business.
It estimated a preliminary net loss of 7.0-9.0 billion yuan (US$1.05-1.34 billion) in January to June period versus a profit of 2.3 billion yuan the previous year, it said in a filing to the Hong Kong stock exchange.
The ban stripped ZTE of its access to crucial US -based suppliers, including Qualcomm.
The company paid $1 billion of the penalty and put $400 million in escrow at a US bank to satisfy the requirement, the department said.
The saga over the fate of the Chinese firm began in April when Commerce banned US companies from selling to ZTE as punishment for its failure to honor an earlier USA agreement to resolve its sanctions-busting sales to North Korea and Iran.More news: This Is the Galaxy Note 9's New S Pen
ZTE's revival was initially set in motion by President Trump, who vowed to help the company get "back into business" via Twitter back in May. White House trade adviser Peter Navarro said last month Trump agreed to lift the ban as a goodwill gesture to Chinese President Xi Jinping. The punishment came after the company made false statements about disciplining 35 employees involved with illegally shipping US -origin goods to Iran and North Korea, Commerce officials said.
ZTE is now allowed to receive shipments from its American suppliers, according to a notice published on the Bureau of Industry and Security website last week.
ZTE was recently allowed to resume some sales in the USA earlier this month, after paying a fine, replacing their entire executive board, and hiring a US affiliated monitor for business operations moving forward.
"The ZTE settlement represents the toughest penalty and strictest compliance regime the Department has ever imposed in such a case", the Commerce Department said.
Last week, a bipartisan group of senators introduced legislation that could reinstate some of the penalties on ZTE. It also broke news of the ban in April.