The Chinese tech giant has been forced to replace its entire leadership staff in the wake of a crippling exports ban for selling tech to Iran and North Korea.
China’s ZTE has had to replace its CEO, CTO, CFO and several vice presidents in order to evade a harsh export ban imposed by the US after the company sold US technology to Iran and North Korea.
The move comes a week after the company named a new board of directors. The company has been forced to do this as a precondition for the US to lift the crippling exports ban, Ars Technica reports.
The exports ban was the culmination of a years-long dispute between the company and the US government, which claims ZTE sold US technology to Iran and North Korea in violation of US sanctions against those countries.
Last year, the company reportedly negotiated a settlement, but the US later claimed ZTE failed to comply with the deal conditions, and imposed a ban on domestic companies providing technology to ZTE.
ZTE phones depend heavily on Google Android OS and Qualcomm chips, so the ban has basically meant a death sentence to the company, according to Ars Technica. ZTE was forced to suspend its operations in May.
Under a new settlement deal effective since July 2, the US imposed a new $1 billion fee on top of the $890 million ZTE paid last year, beside some $400 million in escrow stashed away as a deterrent against further violations.
Then, to add insult to injury, the US demanded a total replacement of the company’s leadership under the pretext that a new leadership would be more likely to respect US export controls.
In exchange, the US temporarily lifted the export ban until the end of July, saying that the ban would be lifted permanently should ZTE live up to other parts of the agreement.
However, there are opponents of the settlement in the US, such as Sen. Tom Cotton (R-AR), who last year claimed that “the death penalty is an appropriate punishment for their behavior,” in reference to the actions of ZTE’s leadership in trading with Iran and North Korea.
Cotton was among a bipartisan group of lawmakers who included some language blocking a ZTE deal in a must-pass military funding bill last month. The legislation passed the US House of Representatives, Ars Technica reports, but without ZTE-related parts. Now, the House and the Senate have to decide whether or not to include ZTE-related language before the legislation goes to US President Donald Trump for his signature or veto.