American Companies Banned from Selling to Chinese Phone Maker ZTE

American Companies Banned from Selling to Chinese Phone Maker ZTE

American Companies Banned from Selling to Chinese Phone Maker ZTE

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 move comes as the USA government cracks down on the presence of Chinese phone companies like ZTE and Huawei in the U.S. The DOC, however, contends that ZTE failed to significantly penalize those employees. ZTE apparently did fire the four workers, but did not discipline the others and still gave them bonuses. "This egregious behavior can not be ignored", Commerce Secretary Wilbur Ross said in the statement.

Back in 2012, Reuters reported that ZTE had signed contracts with Iranian telecom companies that would see ZTE devices on Iranian store shelves.

Republican Senator Richard Burr, chairman of the Senate Intelligence Committee, said he was concerned about the ties to the Chinese government of Chinese telecoms companies like Huawei Technologies Co and ZTE. These bonuses were not supposed to be handed out under the terms of its agreement with the U.S. In addition, these employees were supposed to receive letters of reprimand from ZTE brass that did not get sent until March, 2018.

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"We can't trust what they are telling us is truthful", the official continued.

"If the company is not able to resolve it, they may very well be put out of business by this".

In the UK, Dr Ian Levy, technical director of the National Cyber Security Centre, wrote to telecommunications organisations saying: "NCSC assesses that the national security risks arising from the use of ZTE equipment or services within the context of the existing UK telecommunications infrastructure can not be mitigated".

Intel, Microsoft, Qualcomm and Micron Technology are also among USA suppliers to ZTE, according to data compiled by Bloomberg. The majority of the ZTE smartphones in the United States are sold by the carriers.

What's more, earlier this year, a senior official in President Trump's administration confirmed earlier this year United States government is considering developing its own 5G network, containing parts manufactured in China, to counter, er, security threats from China. However, hardware and software aspects of those devices originated in the United States, which is a blatant violation of Iranian trade embargoes instituted by the US government.

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