ZTE banned from buying from United States firms

ZTE banned from buying from United States firms

ZTE banned from buying from United States firms

The agreement that was violated stemmed from ZTE's attempt at conspiring to illegally ship United States goods to Iran a few years back, which it had already paid heavy fines from.

Earlier today, Chinese electronics maker ZTE was hit with a seven-year ban on American exports from the U.S. Department of Commerce.

The company's initial guilty plea was met with up to $1.2 billion penalties and fines, along with the dismissal of four senior employees, along with more fallout for lower level employees.

The U.S. Department of Commerce has announced a ban on exporting parts to the Chinese smartphone manufacturer ZTE.

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The Department of Commerce has now learned that ZTE made false statements to the US government during the 2016 settlement negotiations as well as the 2017 probationary period. As part of the ensuing settlement, ZTE promised to fire four senior employees and discipline 35 others by either reducing their bonuses or reprimanding them. "This egregious behavior can not be ignored", said Secretary of Commerce Ross.

It also said that "ZTE's false statements only were reported to the US Government after BIS requested information and documentation showing that employee discipline had occurred".

The department's action against ZTE also prohibits large American companies like Qualcomm and Micron Technology from selling their chips and components to ZTE, China's largest listed telecommunications equipment supplier. This means that among other things, ZTE can no longer buy Snapdragon processors from Qualcomm, which is likely going to be a big blow for the company's future plans.

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The department's so-called Entity List requires that USA and foreign companies doing business with those on the list first obtain a license. The majority of the ZTE smartphones in the U.S. are sold by the carriers. According to Levy, adding ZTE into the mix would make it impossible to manage the security risks and "the result would be an unacceptable national security risk to the United Kingdom telecoms infrastructure environment".

Intel, Microsoft, Qualcomm and Micron Technology are also among U.S. suppliers to ZTE, according to data compiled by Bloomberg.

The ruling comes as a effect of ZTE's actions after a court ruling previous year.

ZTE had planned to introduce a 5G smartphone in about a year, with possibilities for a 5G table or wireless-internet hub, Cheng Lixin, ZTE's U.S. chief, said at the CES trade show in Las Vegas in January.

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