Tuesday, 16 October 2018
Latest news
Main » US Cuts off ZTE From American Tech Suppliers

US Cuts off ZTE From American Tech Suppliers

17 April 2018

The US had ZTE pay $1.2 billion in fines in March 2017 for allegedly shipping telecommunications equipment to Iran and North Korea in violation of unilateral American sanctions.

As part of the agreement, Shenzhen-based ZTE promised to dismiss four senior employees and discipline 35 others by either reducing their bonuses or reprimanding them, senior US officials told Reuters.

The latest NCSC warning about ZTE coincides with the announcement of a seven-year ban on USA companies selling products and services to ZTE due to its alleged failure to act against personnel who sold sensitive U.S. technology to Iran and North Korea, according to The Guardian.

Denying ZTE export privileges prevents the company from "participating in any way in any transaction" subject to the US government's Export Administration Regulations, which govern sales of sensitive technology overseas.

The company "covered up the fact that ZTE paid full bonuses to employees that had engaged in illegal conduct, and failed to issue letters of reprimand", the US Department of Commerce said. ZTE, they say, has refused to discipline the employees responsible as per the agreement.

ZTE, whose Hong Kong and Shenzhen shares were suspended from trade on Tuesday, said in a statement it was assessing the implications of the US decision and was communicating with "relevant parties".

The company swung back into a profit last year after a loss in 2016 due to a payment of a record fine, which the company agreed to pay the United States government to settle a five-year probe of trade sanctions violations.

Unnao rape case: BJP MLA Kuldeep Singh claims was in Kanpur
Mir added that Chief Minister Mehbooba Mufti had expressed her displeasure with the BJP over the "conduct of two ministers". They made the two ministers resign.

It is playing to concerns that the continuing trade tension between the U.S. and China could turn into a full-blown trade war, which would be damaging to the U.S. economy.

The US Commerce Department said that ZTE lied to American officials about punishing employees who violated US sanctions against North Korea and Iran.

The U.S. action could be catastrophic for ZTE since American companies are estimated to provide 25 percent to 30 percent of the components used in ZTE's equipment, which includes smartphones and gear to build telecommunications networks.

Following a report in the UK's Financial Times newspaper on Monday, the UK's National Cyber Security Centre (NCSC) published a brief statement on its website describing ZTE Corp.

ZTE uses a number of USA suppliers, including Intel, Microsoft, Micron Technology and Qualcomm.

Other optical component companies also slid, with Lumentum Holdings Inc falling 8.9 percent and Finisar Corp dropping 4 percent.

ZTE's main business is networking equipment where they are a major player alongside other mentionable companies such as Nokia, Ericsson, Huawei and Cisco. It has relied on US companies including Qualcomm Inc, Microsoft Corp and Intel Corp for some components. ZTE already sells both its branded and white-label smartphones via mobile carriers AT&T and Verizon in the US.

US Cuts off ZTE From American Tech Suppliers