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ZTE has reached a deal to have U.S. sanctions lifted

China's ZTE said it ceased major operations last month due to the ban

In addition, ZTE will make changes to management, and put a further $400 million in escrow to cover possible future fines.

The penalties are in addition to the $892 million in penalties ZTE already paid to the USA government under a March 2017 settlement agreement.

The May ban came after the government determined that ZTE violated terms of its 2017 settlement by failing to fire employees involved with illegally shipping United States equipment to Iran and North Korea.

Commerce Department spokesman James Rockas said on Tuesday that "no definitive agreement has been signed by both parties".

The company was found to have shipped its sophisticated telecommunications equipment to both nations and to have repeatedly lied to USA investigators about its actions. The government will suspend the 10-year ban but it can activate the ban if there are any violations.

The Commerce Department stated that ZTE had been put on the list for "falsely informing the U.S. Government that it would or had disciplined numerous employees responsible for the violations that led to" a previous agreement in March 2017, for the violation of United States trade agreements.

Qualcomm supplies parts for ZTE phones, and its shares rose today on the news.

ZTE has promised to replace its board and executive team as part of the deal.

He also warned that if the company is caught not complying to the letter of the new agreement, strict punishment will snap into place.

ZTE had agreed to dismiss four senior employees and discipline 35 others either by reducing their bonuses or reprimanding them, according to senior Commerce Department officials.

The June pact is costly for a company with revenues of US$17 billion a year.

But the deal came under fire from Senator Chuck Schumer, who accused President Trump of shooting "blanks" at China while aiming his trade fire at allies such as Europe and Canada.

The US had blocked ZTE's access to American suppliers, saying it had violated a sanctions settlement. He said the penalties should serve as a very strong deterrent for "other potential bad actors" to force compliance with US trade restrictions. Secretary of Commerce Wilbur Ross announced this development in relation to ZTE's ban.

ZTE will also be required by the new agreement to retain a team of special compliance coordinators selected by and answerable to BIS for a period of 10 years.

The announcement boosted shares in U.S. component makers including Acacia Communications, Oclaro and Lumentum Holdings.

To date, total penalties have already reached about $2.29 billion.