Chinese telecommunications giant ZTE, has agreed to pay sum of $1 billion fine after much negotiation with the Trump Administration, Secretary of Commerce Wilbur Ross confirmed in a report by TechCrunch. Ross made the comments on CNBC’s morning show Squawk Box.
The fine was as a result of an investigation showing that ZTE had violated U.S. sanctions by selling telecom technology to Iran and North Korea.
Recall, as part of the original settlement with the U.S. government last year, ZTE had agreed to accept a $1.19 billion fine and made personnel changes to satisfy U.S. regulators.
The Trump administration, according to the TechCrunch report, then took that penalty even further, banning U.S. companies from selling components to ZTE for seven years, components critical to ZTE’s entire product line.
That decision was expected to kill the company, which employs roughly 75,000 workers and had been worth about $20 billion before the ban.
While the ban seemed to be the end of the company, President Donald Trump seemed to offer it something of a reprieve on May 13, when he tweeted that he would instruct the Commerce Department to try to work out a deal that would offer “a way to get back into business, fast.” While the president is known for mercurial decision-making, the turnabout deeply surprised DC insiders, with many national security officials vociferously opposed to any deal to resuscitate the company.
In addition to a $1 billion fine, the company has made several personnel changes, including rotating out the company’s Communist Party leader. The company is also believed to have agreed to a $400 million escrow that would be used to pay for future penalties. An American monitoring team will join the company to ensure compliance with the law as well.