Acacia stock rises 3% as Chinese customers eyes resuming U.S. business
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The Maynard headquarters of Acacia Communications at Mill & Main.
Shares of Maynard telecommunications equipment maker Acacia Communication opened Thursday up more than 3 percent after news its largest customer — a Chinese smartphone maker — would soon be allowed to do business in the U.S.
In a statement late Wednesday, the U.S. Department of Commerce it has signed an agreement with ZTE to lift the denial order once the company deposits $400 million in escrow.
In addition to the hefty fine, ZTE has agreed to retain a special compliance team selected by the Commerce Department to monitor the company's compliance with U.S. export control laws, Ross announced.
The suspended 10-year ban — effectively lifting the company’s ban on doing business with U.S. suppliers — will be in place once the funds are deposited.
ZTE was sanctioned in April, hit with a seven-year ban on importing American products after the U.S. Department of Commerce determined the company failed to live up to a March 2017 agreement. The agreement had ZTE paying a civil and criminal penalty and forfeiture of nearly $1.2 billion after illegally shipping telecommunications equipment to Iran and North Korea, making false statements, and obstructing justice, including through preventing disclosure to and affirmatively misleading the U.S. government.
Last month, however, ZTE and the U.S. Department of Commerce agreed that ZTE would pay a $1.4-billion fine, retain a special compliance team selected by the U.S. and replace its entire board of directors and key leadership positions.
Acacia Communications could not immediately be reached for comment.
The company said last month it would be awaiting U.S. guidance to resume business with ZTE. Acacia said it’s second quarter revenue could decrease as much as $13 million due to the ban of its largest customer.
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