United States places trade embargo on Chinese telecom equipment maker

US government bans American companies from selling components to ZTE

The U.S. blocked Chinese telecommunications-gear maker ZTE Corp. from exporting sensitive technology from America, alleging the company made false statements to U.S. officials.

The Chinese company pleaded guilty a year ago in federal court in Texas for conspiring to violate USA sanctions by illegally shipping US goods and technology to Iran. ZTE paid almost $900 million in fines and fired multiple employees in accordance with the court.

A senior official with the Commerce Department Bureau of Industry and Security told reporters that the ZTE decision was unrelated to the administration's threats to impose tariffs on Chinese imports, saying the actions against the Chinese company are part of an investigation.

However, ZTE was also supposed to "discipline" 35 other employees, which the company has since admitted to having not done.

ZTE "provided information back to us basically admitting that they had made these false statements", said a senior department official.

The denial order against ZTE comes amid brewing tensions between the USA and China that have raised concerns of a trade war between the world's two biggest economies.

A senior official told reporters the department suspended export privileges for ZTE, meaning it can no longer receive U.S. components to incorporate into their products "to prevent them from furthering their illegal activities". "And in global commerce, truth is pretty important".

ZTE didn't respond to calls seeking comment that were made after business hours in China.

A five-year federal investigation found last year that ZTE had conspired to evade USA embargoes by buying US components, incorporating them into ZTE equipment and illegally shipping them to Iran.

"ZTE misled the Department of Commerce". As part of the initial agreement, ZTE was allowed to continue to work with USA companies, assuming it adhered to the rules laid out in the agreement.

ZTE used third-party companies to hide the export of United States components to the sanctioned countries, and then hid the information by "sanitizing databases" with information on the sales.

United States authorities issued an order Monday barring USA exports of sensitive technology to Chinese telecom giant ZTE because of false statements made during an investigation into its illegal sale of goods to Iran and North Korea.

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