United States companies banned from selling components to ZTE

United States companies banned from selling components to ZTE

The company can resume purchasing these components from the US after seven years. Commerce said the individuals were identified by a trail of internal memos within ZTE discussing how the company might evade USA restrictions on shipping to Iran. It also paid $890 million in fines.

This warning follows similar action from the USA government, which has long-prohibited American telecoms firms from buying network equip from Chinese firm Huawei, and last month went so far as to warn USA citizens not to use smartphones from the Chinese companies Huawei and ZTE.

The penalty is steep, given that US companies are believed to provide more than a quarter of the components used in ZTE telecom equipment and mobile devices. While the company went ahead with the launch, there is no announcement about the AT&T partnership.

As part of the agreement, Shenzhen-based ZTE Corp promised to dismiss four senior employees and discipline 35 others by either reducing their bonuses or reprimanding them, senior Commerce Department officials told Reuters. Acacia Communications Inc, which got 30 percent of its total 2017 revenue from ZTE, tumbled 35 percent, hitting a near two-year low. The company will now be banned from incorporating any commodity, software or technology from USA companies in any of its products.

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"ZTE made false statements to the US Government when they were originally caught and.made false statements during the reprieve it was given, and made false statements again during its probation", Commerce Secretary Wilbur Ross said in a statement.

On top of the false statements regarding U.S. components, Ross also claims ZTE did not live up to promises when it came to firing or disciplining employees who were directly involved with the initial complaint. It might also be the first steps through the bureaucratic box ticking mission to officially ban ZTE. After the USA placed export restrictions on ZTE in 2016 for Iran sanctions violations, the China's Ministry of Commerce and Foreign Ministry criticized the decision.

A few years back, both Huawei and ZTE came under scrutiny after the U.S government raised concerns over the national security. While a few reports say, the company might actually sell Android-powered devices outside of the United States as it comes with open source software.

Allowing Huawei, ZTE, and other related entities access to US government communications would be inviting Chinese surveillance into all aspects of our lives.

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