China's ZTE says assessing implications of U.S. decision

A Chinese national flag and two flags bearing the name of ZTE fly outside the ZTE R&D building in Shenzhen China

As a result, ZTE is banned once again from exporting products made in the US, until March 13th, 2025.

China is trying to gain access to sensitive USA technologies and intellectual properties through telecommunications companies, academia and joint business ventures, U.S. senators and spy chiefs had warned. "This egregious behavior can not be ignored", Secretary of Commerce Wilbur Ross said in a statement. Instead of reprimanding ZTE staff and senior management, ZTE rewarded them. It is not clear if the ban extends to shipments by those suppliers from foreign ports; the Commerce Department said it will get back to me on that matter.

The settlement involved telecommunications gear that ZTE supplied to Iran that contained USA components in violation of a trade embargo.

The action comes in response to ZTE pleading guilty to violating sanction rules by conspiring to sell equipment to Iran.

A worker installs the logo of ZTE, a Chinese communications company in Nanjing, China.

Shares of optical component companies including Lumentum Holdings Inc fell 8.9 percent and Finisar Corp dropped 4.0 percent.

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. At the time, the USA had a deal for the company. ZTE, another Chinese company, now seems to be next in the line of fire of both the United Kingdom and US governments. Pittenger is sponsoring legislation that would strengthen the USA national security review process for foreign investments.

Shortly after the order was issued, the National Cyber Security Centre also reached out to the United Kingdom's telecom entities saying that using any services or equipment provided by ZTE would be a national security risk. ZTE agreed to pay $1.19 billion and to a suspended denial of export privileges for seven years, which could be activated if ZTE's violations continued.

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

The U.S. hit Chinese telecom firm ZTE with a potentially devastating enforcement action on April 16, prohibiting the company from doing business with American firms.

ZTE has sold handset devices to USA mobile carriers AT&T Inc, T-Mobile US Inc and Sprint Corp. It has relied on USA companies including Qualcomm Inc, Microsoft Corp and Intel Corp for components.

The letter cites the fact that ZTE is owned by state, as well as new Chinese laws that alow the government to exert influence over companies and individuals with "wide-ranging powers of compulsion".

Effective immediately, ZTE will no longer be able to use any US -created hardware or software in its devices.

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. ZTE admitted last month that it had taken no action against the 35 employees in question.

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