United States places trade embargo on Chinese telecom equipment maker

United States places trade embargo on Chinese telecom equipment maker

United States places trade embargo on Chinese telecom equipment maker

The U.S. Department of Commerce has banned American firms from selling components to the Chinese phone maker ZTE for seven years for violating the terms of a sanction. The U.S. government has told U.S. wireless firm not to buy Huawei gear, citing concerns over national security. A five year long federal investigation concluded that the company had been buying United States components and using them in its own products, some of which had been distributed in Iran and North Korea. It would suspend a seven-year product ban preventing ZTE from exporting components and parts made in the states as long as it adhered to the signed agreements, and didn't break the rules. As for ZTE, past year it paid a whopping $1.19 billion fine to the USA government for selling goods and services to Iran and North Korea. In fact you might only recognise them for that freaky dual-screen phone that's coming to the United Kingdom very soon. Secretary of Commerce Wilbur Ross was quoted as saying in an announcement by the department.

"This will be devastating to the company, given their reliance on US products and software", said Jacobson.

Commerce officials said the sanctions were unrelated to ongoing disputes over China's aggressive attempts to obtain USA technology and overproduction of steel and aluminum.

While ZTE can survive this ban, it will severely hurt the company in the short-term.

"The UK telecommunications network already contains a significant amount of equipment supplied by Huawei", wrote Ian Levy, technical director of the UK's National Cyber Security Centre, in a letter to telecom companies in the country, according to a person familiar with the letter.

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This means that not only did ZTE break USA trade law and attempt to cover it up, but it is not following through with the punishments for that transgression. The software is released under the open source license, which means that ZTE can presumably continue to install it on its smartphones and tablets.

ZTE was similarly the subject of a 2012 investigation by the FBI and US Commerce Department after allegedly setting up a network of sub-companies to illegally export Microsoft, HP, Oracle, Dell, Cisco, and Symantec products to Iran. Part of the settlement required ZTE to take actions against employees who took part in the violations.

ZTE has sold handset devices to US mobile carriers AT&T Inc, T-Mobile US Inc and Sprint Corp.

The U.S. government had allowed the company continued access to the U.S. market under the 2017 agreement. ZTE did fire the four execs, but it failed to institute any punishment for those 35 employees. Although Commerce Department officials would not discuss the report, they said the department followed up in February.

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