China's ZTE a national security risk, United Kingdom telcos warned

U.S. companies banned from selling components to ZTE		
		
	Brian Heater

       @	   
   	7 hours

U.S. companies banned from selling components to ZTE Brian Heater @ 7 hours

The Commerce Department determined ZTE, which was previously fined for shipping telecommunication equipment to Iran and North Korea, subsequently paid full bonuses to employees who engaged in the illegal conduct, failed to issue letters of reprimand and lied about the practices to US authorities, the department said. Instead of reprimanding the employees, the company is stated to have rewarded them with full bonuses.

ZTE's failure to keep to its agreement resulted in the US Department of Commerce announcing yesterday that all American companies are banned from selling components to ZTE for a period of 7 years.

"The company takes the USA ban seriously and has immediately set up a crisis team, with every division analysing and coming up with measures to deal with the crisis", Yin said in an internal memo to employees seen by the South China Morning Post.

The Chinese telecommunication equipment maker was accused by the US Department of Commerce of making false statements during an investigation into sales of its equipment to Iran.

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.

ZTE halted trading of its shares in Hong Kong and Shenzhen on Tuesday following the announcement of the USA ban.

The Chinese company paid $890 million in fines and penalties after it pleaded guilty past year to conspiring to violate US sanctions by illegally shipping USA goods to Iran.

"ZTE misled the Department of Commerce", Commerce Secretary Wilbur L. Ross in a press release. However, last month, the company admitted it had not taken action against the 35 additional members of staff by fining or otherwise reprimanding them.

The ban on supplying ZTE comes two months after two Republican senators introduced legislation to block the USA government from buying or leasing telecommunications equipment from ZTE or Huawei, citing concern the companies would use their access to spy on US officials.

Similar sentiments were offered by U.S. Republican representative Robert Pittenger, who told Reuters, "China does not play by our rules, and we must be vigilant against Chinese threats to both our economic security and national security".

It is also happening as President Donald (Prince of Orange) Trump starts a trade war with China. Last year ZTE sold 46.4 million smartphones with half of the phones using Qualcomm chips.

That's the position Acacia Communications Inc. To add to the woes, the Britain's National Cyber Security Centre (NCSC) has written to United Kingdom telecoms providers warning them that the use of ZTE's equipment and services could pose a national security risk, the BBC reported. The technology bought by the company includes components central to its products.

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