US officials reached a deal Thursday to ease sanctions which threatened to cripple Chinese smartphone maker ZTE, Commerce Secretary Wilbur Ross said.
Ross told CNBC television the deal includes a $1 billion fine levied on the Chinese firm and a requirement that it change its board of directors.
In April, the Chinese group was cut off from US technology products for violating US sanctions against North Korea and Iran — measures which threatened to put ZTE out of business.
Ross said the agreement calls for “embedding a compliance department” chosen by Washington to monitor company conduct.
“They will pay for those people but the people will report to the new chairman,” Ross said.
“This is a pretty strict settlement. The strictest and largest settlement fine that has ever been brought by the Commerce Department against any violator of export controls.”
Ross said the plan calls for ZTE to create a $400 million escrow account in case of future violations, and a requirement to overhaul the board of directors and executive team within 30 days.
Several US lawmakers have warned against easing sanctions on ZTE, citing national security concerns.
But President Donald Trump last month said he was looking at options to prevent a shutdown of ZTE.
The news comes amid increasing trade tensions between Washington and Beijing, with Trump threatening to impose tariffs of Chinese technology products to reduce a large trade deficit.