U.S. government bans American companies from selling components to ZTE

U.S. government bans American companies from selling components to ZTE

This morning, the U.S. Department of Commerce announced a seven-year export restriction for the company, resulting in a ban on U.S. component makers selling to ZTE.

This time previous year, Chinese electronics giant ZTE pled guilty to violating sanctions on Iran and North Korea.

ZTE was accused to circumventing US sanctions on Iran back in 2016.

ZTE did not disclose the fact it paid full bonuses to employees who engaged in illegal conduct, and failed to issue letters of reprimand, the department said.

The Commerce Department has determined ZTE made false statements to the Bureau of Industry and Security in 2016 and 2017 related to "senior employee disciplinary actions the company said it was taking or had already taken", the department said in a statement Monday.

ZTE, which devised elaborate schemes to hide the illegal activity, agreed to plead guilty after the Commerce Department took actions that threatened to cut off its global supply chain. "This egregious behavior can not be ignored", Ross said in a statement. Instead of reprimanding ZTE staff and senior management, ZTE rewarded them.

A senior department official tells Reuters, in no uncertain terms, that the company, "provided information back to us basically admitting that they had made these false statements".


Trump on Monday accused China along with Russian Federation of devaluing their currencies, opening a new front in his argument that foreign governments are exploiting the U.S.

China is trying to gain access to sensitive U.S. technologies and intellectual properties through telecommunications companies, academia and joint business ventures, United States senators and spy chiefs had warned.

ZTE officials did not immediately respond to requests for comment.

A lawyer representing suppliers to ZTE said that this ban is "highly unusual" and that it will be "devastating to the company".

From January 2010 to March 2016, the company shipped $32 million in United States cellular network equipment to Iran, and made 283 shipments of cell phones to North Korea, with the full knowledge of the highest levels of company management, officials said.

The five-year USA government investigation into ZTE's actions was first revealed in March 2016.

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