United States bans American companies from selling to Chinese phone maker ZTE

The U.S. Department of Commerce has banned American companies from selling components to telecommunications firm ZTE after the Chinese company allegedly made false statements to U.S. regulators. The restriction will keep ZTE from getting parts from US -based suppliers, such as Qualcomm and Dolby. In particular, ZTE had told the BIS it had disciplined the executives responsible for its illegal deals with Iran and North Korea, but in reality none of the individuals were actually disciplined but rather given bonuses.

The Chinese company, a top smartphone seller in the United States, pleaded guilty a year ago in federal court in Texas for conspiring to violate U.S. sanctions by illegally shipping usa goods and technology to Iran.

Naveed Saeed of Engro Foods said the company will be able to reduce its energy consumption by 10 per cent, resulting in significant carbon emission reduction. It said the Shenzhen-based company has cooperated with hundreds of U.S. companies and contributed to the country's job creation.

There is a high chance that ZTE Corp. will take a hit financially from the ban, as it has sold products to American phone companies AT&T Inc. In a letter seen by the FT, Ian Levy, Technical Director of The National Cyber Security Centre in the United Kingdom, has written to United Kingdom telcos, ZTE and Ofcom warning of the dangers of using ZTE products and services.

What's more, earlier this year, a senior official in President Trump's administration confirmed earlier this year U.S. government is considering developing its own 5G network, containing parts manufactured in China, to counter, er, security threats from China.

"ZTE misled the Department of Commerce", said Commerce Secretary Wilbur Ross said in the statement.

ZTE was caught red-handed engaging in trade that violates USA law.

While ZTE can continue to sell its products in the United States, being unable to use parts from Qualcomm, Intel, and other USA companies could prove to be devastating to the firm.

On its website, ZTE says it is the fourth largest supplier of smartphones in the US, serving all four major wireless operators with low and mid-price handsets - including devices for pre-paid plans. This could prevent ZTE from purchasing the Qualcomm Snapdragon chipsets that power its smartphones. 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. The company was required to discipline certain employees as part of that agreement.


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