Ross says the deal includes a $1 billion penalty against ZTE and a U. S.-chosen compliance team to be embedded at ZTE.
Commerce Secretary Wilbur Ross told CNBC on Thursday the U. S. has struck a deal with Chinese telecom giant ZTE to end crippling American sanctions.
Commerce said the deal includes a $1 billion penalty against ZTE and a U. S.-chosen compliance team to be embedded at ZTE.
« We are literally embedding a compliance department of our choosing into the company to monitor it going forward. They will pay for those people but the people will report to the new chairman, » Ross said in a » Squawk Box » interview.
« 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, » he said.
The deal includes $400 million in escrow to cover any future violations as well as requiring ZTE to change its board of directors and executive team in 30 days.
« If they do violate it again, in addition to the billion dollars they are paying us up front, we had them put $400 million in escrow. The total deal is $1.4 billion. That money will be forfeited if they violate anyting… and we still retain the power to shut them down again, » Ross said.
« This should serve as a very good deterent not only for them but for other potential bad actors, » he added.
