US tack­les Chi­nese smart­phone maker

The Punch - - INFORMATION TECHNOLOGY -

THE com­merce Depart­ment bans US com­pa­nies from sell­ing com­po­nents to ZTE amid ac­cu­sa­tions that the chi­nese tele­com giant lied to the US, ac­cord­ing to www.cnet.com.

The US just handed down more penal­ties against a chi­nese telecom­mu­ni­ca­tions giant. And no, this isn’t about Huawei.

The com­merce Depart­ment has im­posed a “de­nial of ex­port priv­i­leges” against ZTE, which trans­lates to a ban on US com­pa­nies sell­ing any prod­ucts and ser­vices to the china-based com­pany. The ban lasts for seven years and comes into ef­fect af­ter ZTE al­legedly vi­o­lated the terms of a 2017 set­tle­ment, of­fi­cials from the com­merce Depart­ment’s Bureau of In­dus­try and Se­cu­rity said mon­day in a con­fer­ence call.

The ban, which could mean US play­ers like Qual­comm and Dolby can’t sell their com­po­nents to ZTE for phones, comes af­ter ZTE pleaded guilty in march 2017 for il­le­gally ship­ping US equip­ment to Iran and North Korea and agreed to pay up to $1.2bn in penal­ties. Part of the set­tle­ment re­quired ZTE to take ac­tions against em­ploy­ees who took part in the vi­o­la­tions.

The com­merce Depart­ment said mon­day that ZTE of­fi­cials lied about rep­ri­mand­ing the em­ploy­ees, and even gave some of them full bonuses.

“In­stead of rep­ri­mand­ing ZTE staff and se­nior man­age­ment, ZTE re­warded them,” com­merce Sec­re­tary Wil­bur Ross said in a state­ment. “This egre­gious be­hav­ior can­not be ig­nored,”

The ac­tion comes amid mount­ing pres­sure on chi­nese telecom­mu­ni­ca­tions com­pa­nies and a broader es­ca­la­tion of tar­iffs from both the US and china.

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