Federal officials on Monday banned Chinese smartphone maker ZTE from using components imported from the U.S. for a period of seven years.
The Commerce Department said a seven-year “denial of export privileges” could be activated if ZTE violated the terms of a March 2017 settlement over illegal shipments to Iran and North Korea.
The agency found the company misled the department’s Bureau of Industry and Security in 2016 and 2017 — during and after settlement negotiations — about disciplinary measures taken against senior employees.
“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 department said the order was not related to the current trade spat between the U.S. and China. ZTE has also come under pressure from U.S. officials of late due to the potential security implications of its ties to the Chinese government.
Filed Under: Industry regulations