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. Under the terms of its guilty plea, ZTE paid $890 million in fines, and agreed to fire some senior staff, and strip bonuses from 35 others.
According to the Ross, Jr., the order is being issued in response to ZTE illegally sending telecommunications equipment to North Korea and Iran.
"We're deeply concerned about the risks of allowing any company or entity that is beholden to foreign governments that don't share our values to gain positions of power inside our telecommunications networks", FBI Director Christopher Wray said at the time.
Aside from illicit distribution of American resources, the U.S.is also accusing ZTE of lying to officials, "and obstructing justice including through preventing disclosure to and affirmatively misleading the U.S. Government".
Acacia, Oclaro and other optical device makers took a hit after the commerce department issued new sanctions on ZTE.
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The ban bars U.S. companies from trading with ZTE, and includes the supply of components ZTE needs in order to make its smartphones and networking equipment. ZTE kept 35 employees that were tied to the illegal activities.
ZTE had planned to introduce a 5G smartphone in about a year, with possibilities for a 5G table or wireless-internet hub, Cheng Lixin, ZTE's United States chief, said at the CES trade show in Las Vegas in January.
In response to eWEEK's request for comment on the Commerce Department's action, ZTE's US -based public relations agency said it hadn't received any comment from the company to share with news media.
The agreement that was violated stemmed from ZTE's attempt at conspiring to illegally ship U.S. goods to Iran a few years back, which it had already paid heavy fines from. The majority of the ZTE smartphones in the U.S. are sold by the carriers. "At present, the company is assessing the full range of potential implications that this event has on the company and is communicating with relevant parties proactively in order to respond accordingly", ZTE said in a statement on Tuesday morning, declining to comment beyond the statement.
If you've ordered one, you might want to think again, because the National Cyber Security Centre (NCSC) claims the company poses a rick to the UK's national security. The company can resume purchasing these components from the USA after seven years.
In a letter seen by the Financial Times, Ian Levy, technical director at the NCSC, wrote to United Kingdom telcos, ZTE and Ofcom warning "the use of ZTE equipment or services within existing telecommunications infrastructure would present risk to United Kingdom national security that could not be mitigated effectively or practicably".