China's ZTE sees heavy losses in H1 due to USA penalty

The ban lift will allow ZTE, China's second-largest telecommunications equipment maker, to resume business with US companies.

Lawmakers have expressed concern that removing the company's seven-year restriction on receiving parts from US suppliers could pose national security risks.

Because ZTE relies on USA suppliers to make its smartphones.

The Commerce Department had said it would remove the ban after ZTE paid a $1 billion penalty and placed $400 million in a U.S.

"The substantial decrease in results was mainly due to operating losses and provision for losses resulting from the suspension of the major operating activities", ZTE said in the exchange filing.

In April, the Commerce Department barred ZTE from importing American components for its telecommunications products for the next seven years, practically putting the company out of business. "President Xi of China and I are working together to give massive Chinese phone company, ZTE, a way to get back into business, fast".

The Chinese company is accused of selling sensitive technologies to Iran and North Korea, despite a USA trade embargo. ZTE pleaded guilty previous year over the sanctions violations.

Many U.S. lawmakers see the company as a national security threat and, on Thursday, a group of Republican and Democratic U.S. senators urged that ZTE's penalties be reinstated.

The company also was required to replace its board of directors, retain outside monitors and put Dollars 400 million in escrow to cover any future violations - a final step it took this week.

The Commerce Department said Friday that these measures were the "harshest penalties and strictest compliance measures ever imposed in such a case".

The U.S. Senate paved the way for a showdown with Trump over the issue last month, when it passed an annual defense policy bill with an amendment attempting to reverse the deal.