The United States Department of Commerce banned ZTE from sourcing components from companies based in the country as punishment for not sticking to the terms of an earlier sanctions violation settlement. This meant that the smartphone manufacturer couldn’t source processors from Qualcomm and was thus effectively tripled. ZTE was actively involved in negotiations with the government to try and find a way around the ban. The Commerce Department has announced today that it will be lifting the ban on ZTE but will also fine it $1 billion.

The deal gives much-needed breathing space to ZTE which was effectively crippled by the ban. ZTE had confirmed a couple of weeks ago that it had ceased core business operations soon after the ban was enforced.

ZTE has agreed to a $1 billion fine by the Department of Commerce and the terms of this deal also include a United States-selected compliance team which will be based at ZTE for ten years to ensure that there are no similar violations in the future.

ZTE also has to change its board of directors as part of this deal as well as its executive leadership within the next 30 days.

If ZTE fails to meet these terms it could face a potential 10 years ban. The Department of Commerce says that this is the first time that it has clinched “such stringent compliance measures in any case.”

Filed in General. Read more about ZTE. Source: justice.gov

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