China's ZTE Will Pay Huge Fine to End US Sanctions

The United States has reached a deal with Chinese telecommunications giant ZTE Corp. that includes a $1 billion fine, says Commerce Secretary Wilbur Ross. The resolution of the ZTE case may clear the way for the US to make progress in its high-stakes trade talks with China, per the AP. The huge fine comes on top of the roughly $1 billion ZTE has already paid for selling equipment to North Korea and Iran in violation of US sanctions. Ross, speaking on CNBC on Thursday, said that ZTE also must put $400 million in escrow, which will be forfeited if there are any violations of the agreement.

Ross also said that a compliance team picked by the US will be embedded at ZTE and that the Chinese company must change its board and executive team in 30 days. "We still retain the power to shut them down again,” says Ross, per the Wall Street Journal. In April, the Commerce Department blocked ZTE from importing American components for seven years, having concluded that ZTE deceived US regulators after it settled charges last year of violating sanctions against Iran and North Korea. ZTE relies on US parts, and the ban also hurt ZTE's American suppliers. (President Trump previously said he planned to help ZTE because too many jobs would be lost in China.)

(More China stories.)