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Department of Commerce bans ZTE from exporting tech from US

Department of Commerce bans ZTE from exporting tech from US”

"This egregious behavior can not be ignored", US Secretary of Commerce Wilbur Ross said. As part of a requested update, ZTE stated that they had made disciplinary action against ZTE employees who were involved in the selling of goods to Iran and North Korea.

It was fined $890 million and agreed to dismiss four members of senior staff, and to discipline 35 more.

Just one year later, the DoC says it will be exercising that clause after finding that, while negotiating that settlement, ZTE had lied to the department's Bureau of Industry and Security.

CICC predicted the Commerce ban will have a significant effect on ZTE's business - and perhaps on the building of wireless networks. A denial of export privileges prohibits a person from participating in any way in any transaction subject to the EAR.

The detail is that ZTE did not comply with a part of this agreement.

These false statements covered up the fact that ZTE paid full bonuses to employees that had engaged in illegal conduct, and failed to issue letters of reprimand. ZTE may have lied about all of that too, which is what pissed off the U.S. government.

"ZTE made false statements to the U.S. Government when they were originally caught and put on the Entity List, 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 provided to TechCrunch.

Huawei phones are already effectively shut out of the USA market, but ZTE has made inroads.

The move Monday by the US Commerce Department against ZTE, which sells smartphones and other telecommunications equipment around the world, comes amid a tense clash between the United States and China over trade and technology. It has relied on US companies including Qualcomm Inc, Microsoft Corp and Intel Corp for components.

The West warned telecoms operators not to use ZTE equipment because its state ownership raised security fears.

A spokesperson for BT told the Financial Times: "BT takes the security of the UK's critical national infrastructure very seriously and has a robust testing regime in place to ensure that the equipment from all suppliers used in our network remains secure".

The ban doesn't necessarily prevent the Chinese giant from selling its products to USA consumers, but it does pose a problem with regards to the manufacturing supply chain.

The U.S. government announced Monday it is banning American companies from doing certain business deals with a Chinese tech giant for the next seven years. Those steps may be problematic, if only because ZTE USA is a separate organization and may not have had a role in the sanctioned activities. Without those, I'd imagine life might be tough on ZTE unless they can find replacements.

In February, US intelligence agencies warned Americans against buying ZTE and Huawei phones, saying the companies posed a security threat to American customers.

ZTE is appears to be in an untenable position as an worldwide purveyor of communications equipment.



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