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, which sells smartphones in the United States, pleaded guilty previous year in federal court in Texas for conspiring to violate US sanctions by illegally shipping USA goods and technology to Iran. As part of the initial agreement, ZTE was allowed to continue to work with US companies, assuming it adhered to the rules laid out in the agreement.
These false statements covered up the fact that ZTE paid full bonuses to employees that had engaged in illegal conduct, and failed to issue letters of reprimand.
The Department of Commerce has now determined ZTE made false statements to BIS in 2016, during settlement negotiations, and 2017, during the probationary period, related to senior employee disciplinary actions the company said it was taking or had already taken.
"ZTE misled the Department of Commerce.Instead of reprimanding ZTE staff and senior management, ZTE rewarded them.This egregious behaviour can not be ignored", Ross said. Instead of reprimanding ZTE staff and senior management, ZTE rewarded them.
"ZTE made false statements to the US Government when they were originally caught and.made false statements during the reprieve it was given, and made false statements again during its probation", Commerce Secretary Wilbur Ross said in a statement. "That was in response to the US asking for the information".
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.
Douglas Jacobson, an exports control lawyer who represents suppliers to ZTE, called the ban highly unusual and said it would severely affect the company.
Chinese smartphone maker ZTE has been hit with United States export restrictions related to charges that it illegally shipped telecom equipment to Iran and North Korea.
ZTE officials did not immediately respond to requests for comment. Today, though, the United States government has banned U.S. companies from selling to the Chinese company.
The five-year United States government investigation into ZTE's actions was first revealed in March 2016.