But the bipartisan senate amendment, which has been added to the must-pass National Defense Authorization Act, would essentially kill that agreement by retroactively reinstating financial penalties and continuing the prohibition on ZTE's ability to sell to the US government.
The ban, which has prevented ZTE from buying the USA components it relies on to make smartphones and other devices, will not be lifted until ZTE pays a fine and places $400-million more in an escrow account in a US -approved bank. In return, the White House rescinded a seven-year ban on purchases of US components that had forced ZTE to suspend most operations.
The U.S. Commerce Department can exercise discretion in granting exceptions. Tom Cotton (R) said "ZTE said they couldn't remain in business, or at least not remain anything other than a cell phone hand-held business, if the denial order from March was in effect".
According to a Reuters estimate based on company filings and a source with knowledge of the matter, that could result in about 40 senior executives being replaced including its 14-person board, based on its current management structure.
The Hong Kong-listed stock of ZTE (ZTCOF), which makes smartphones and other telecommunications equipment, had been suspended for the past eight weeks after the US Commerce Department blocked American firms from selling parts or providing services to the company.More news: Kate Middleton takes George and Charlotte to watch William in polo match
Hong Kong's benchmark Hang Seng index was down 0.6 per cent by the midday break.
The decision to lift the USA ban on ZTE has faced sharp criticism from United States politicians, including from some Republicans.
The ban forced ZTE to suspend major operations, and trading in its shares in were halted on 17 April.
The case has become highly politicized and a key focus of bargaining talks as Washington and Beijing look to avert a trade war.
Zhongxing Telecommunications Equipment (ZTE) Corporation is a Chinese company headquartered in Shenzhen, Guangdong, China.
Democratic and Republican lawmakers have said they believe ZTE's sales to Iran represent particularly "dangerous" breaches of US national security.