Commerce Department to Fine ZTE $1 Billion
Updated: added Ross' title
The Commerce Department has reached a deal with ZTE that will get the company out from under a ban on U.S. parts and software. Under there terms of the agreement, ZTE will pay a fine of $1 billion and put an additional $400 million into escrow that it will forfeit if it violates the terms. In addition to the fine, ZTE must change its entire board of directors within 30 days. Further, the U.S. will require a compliance team to monitor the company. "I'm very, very happy with this arrangement," said Commerce Department Secretary Wilbur Ross on CNBC. "It is the strictest and largest fine that has ever been brought by the Commerce Department. We are literally embedding a compliance department of our choosing into the company." It's not clear how quickly ZTE will be allowed to get back to work. Analysts believe the company has lost billions of dollars during the shutdown, amidst soured relationships with partners and customers. ZTE was punished for violating the terms of an earlier settlement that was put in place after it was caught selling parts to Iran and North Korea.
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ZTE has taken the first step toward resuming operations by forking over $1 billion to the U.S. Department of Commerce.