According to the U.S. Commerce Secretary Wilbur Ross, under the deal, ZTE will change its board and management within 30 days, pay a $1 billion fine and put $400 million in escrow. The government will suspend the 10-year ban but it can activate the ban if there are any violations.
ZTE must also retain a compliance team selected by the Commerce Department for 10 years. The company already has a U.S. court-appointed monitor.
"We will closely monitor ZTE's behavior," Ross said in a statement. "If they commit any further violations, we would again be able to deny them access to U.S. technology as well as collect the additional $400 million in escrow."
The announcement follows negotiations to save the Chinese company, which had already paid $892 million in penalties after a settlement in March 2017. ZTE was forced to halt production after being slapped with the seven-year export ban in response to its violation of sanctions against Iran and North Korea and "misleading the U.S. government."
One of the U.S. companies concerned about STE's future in the U.S. is Qualcomm Inc, whose products account for the lion's share of chips inside ZTE smartphones. Separately, Qualcomm is trying to get Chinese approval for its pending $44 billion acquisition of NXP Semiconductors NV.
Qualcomm Chief Executive Officer Steven Mollenkopf said on Thursday he hoped the ZTE agreement would pave the way for the NXP approval.