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US bans American companies from selling products to ZTE – ANITH
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US bans American companies from selling products to ZTE

US bans American companies from selling products to ZTE


For ZTE, the US is closed for business.

Image: Paco Freire/SOPA Images/LightRocket via Getty Images

Chinese phone and mobile equipment maker ZTE just received a stinging slap on the wrist from the U.S. Department of Commerce.

On Monday, the Commerce Department announced that it would begin denying export privileges to ZTE for repeatedly misleading its Bureau of Industry and Security. 

A denial of export privileges means that ZTE will not be able to purchase mobile components from American companies. The punishment outlined by the “Denial Order” will last for a biblical seven years.

The fiasco is just the latest point of tension between the Chinese mobile company and the U.S. government. In February, the NSA, CIA, and FBI issued a warning that ZTE and Huawei smartphones were not to be trusted because the Chinese government could be using them to spy on American citizens. Yikes.

So, what the heck did ZTE do… this time?

In March 2017, ZTE paid nearly $2 billion in a settlement to the U.S. government for violating trade sanctions. The company had been selling its equipment to Iran and North Korea, which was a major no-no under the trade agreement.

In addition to paying back a bunch of cash, ZTE promised the U.S. government that it would formally reprimand its executives and deny them bonuses for executing this illegal activity. ZTE repeatedly told the U.S. that it was complying, but the Department of Commerce found that the offending executives were still getting bonuses, and that ZTE had never issued formal reprimand letters. Yes, not sending letters is what got ZTE into this mess.

Now, the U.S. government is dropping the hammer.

“ZTE made false statements to the U.S. Government when they were originally caught and put on the Entity List, made false statements during the reprieve it was given, and made false statements again during its probation,” Secretary of Commerce Ross said in a statement.

Mashable has reached out to ZTE to get its take on the accusations Secretary Ross and his department are levying against ZTE. We will update this story if and when we hear back.

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Anith Gopal
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