ZTE to pay $1.4B U.S. penalty within 60 days

June 13 (UPI) -- Chinese smartphone maker ZTE said Wednesday it will pay the $1.4 billion penalty levied by the U.S. government within two months.

ZTE said it will make a lump sum payment of $1 billion as part of a settlement agreement with the United States. The other $400 million will be put in escrow.

ZTE will also replace its board of directors and create a compliance committee.

The agreement comes just weeks after the U.S. government ordered American firms to stop doing business with ZTE, because officials said the company violated U.S. sanctions against exporting to Iran and North Korea.

The sanctions influenced ZTE's decision recently to cease operations.

President Donald Trump's administration has attempted to lift the sanctions, but the U.S. Senate scuttled that effort Tuesday.

A bipartisan amendment was added to the National Defense Authorization Act to reinstitute the penalties against ZTE.

U.S. Commerce Secretary Wilbur Ross announced a deal last week to keep ZTE in business in exchange for fines and a change in management. It allowed the company to resume trading on the Hong Kong exchange for the first time since April.

Wednesday, ZTE said it's prepared to restart operations. ZTE shares fell 42 percent on the news and wiped out nearly $8 million in market value.