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Following the ban on selling USA -made hardware (and potentially software) to ZTE earlier this year, it appears that the company may have reached a compromise with the us government, according to Reuters.

The fine comes on top of a roughly $1 billion penalty ZTE has already paid for having sold equipment to North Korea and Iran in violation of USA sanctions.

"We will closely monitor ZTE's behavior", Commerce Secretary Wilbur Ross said in a statement.

Under the deal, the company will also set aside $400 million in escrow to cover any future violations and change its board of directors and executive team, CNBC reported.

ZTE ceased major operations in April after a seven-year ban was imposed on the company for breaking a 2017 agreement that was reached after it was caught illegally shipping goods to Iran and North Korea.

Under the deal, ZTE must retain a compliance team selected by the Commerce Department for 10 years.

US Commerce Secretary Wilbur Ross, who is now in Beijing for trade talks with China and told CNBC that a deal worth $1.4 billion had been struck.

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He said the Commerce Department's $1.4 billion fine, including $400 million in escrow, brings United States penalties between last year and this year to $2.3 billion. "It's unprecedented to have USA agents as monitors ..."

The ban forced ZTE, which relies on US components, to halt operations and would have ended most of its business. Post calculations of U.S. parts in the company's products would also have to be on a public website.

An agreement that allows the crippled company to reopen was seen as a key Chinese demand as the world's two largest economies try to avoid a trade war that could undermine global growth.

Shares in NXP Semiconductors NV rose 6.5 per cent to $121.98 in NY after news of the ZTE deal was announced.

Trump has indicated he views the handling of ZTE as part of his administration's broader effort to renegotiate trade conditions with China. The agreement signals that China will be more likely to approve the $43 billion acquisition of NXP by Qualcomm Inc., a deal that has been pending for 18 months.

Trump has threatened to slap tariffs on at least $50 billion in Chinese imports shortly after publishing a final list of targets on June 15.

ZTE, which sources up to 30 per cent of its components from the United States, paused its operations as a result and claimed its survival was at risk. The team will monitor ZTE's adherence to USA export control laws - an arrangement the department described as the most stringent requirements it has ever imposed.


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