U.S. companies have been banned from selling components to ZTE

By | 16th April 2018
ZTE logo CES 2015

Huawei had a pretty rough start to 2018, with the U.S. government reportedly pressuring AT&T and Verizon not to sell Huawei's new flagship phone, but now it looks like things are going badly for another Chinese phone maker.

The U.S. Department of Commerce is banning American companies from selling components to ZTE. This ban is being put in place because ZTE pleaded guilty to illegally shipping U.S. technology to Iran, and in addition to paying $890 million in fines, ZTE promised to dismissing four employees and disciplining 35 others by reducing their bonuses.

However, ZTE admitted last month that while it did fire the four senior employees that it had promised to let go of, it did not discipline or reduce the bonuses of the 35 other employees.

“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," said Secretary of Commerce Wilbur J. Ross. "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."

This ban will be a big blow to ZTE because it means that they won't be able to get components from companies like Qualcomm, Intel, and others. It could also make other companies, like the major U.S. carriers, wary of dealing with ZTE for fear of getting negative attention from the U.S. government.