US blocks American companies from selling to ZTE

The US Commerce Department on Monday blocked American companies from selling components to leading Chinese telecom equipment maker ZTE Corp for seven years, saying ZTE violated terms of a sanctions violation case.

ZTE, a top smartphone seller in the United States, pleaded guilty last year in federal court in Texas for conspiring to violate US sanctions by illegally shipping US goods and technology to Iran. It paid $890 million in fines and penalties, with an additional penalty of $300 million that could be imposed.

As part of the agreement, Shenzhen-based ZTE Corp promised to dismiss four senior employees and discipline 35 others by either reducing their bonuses or reprimanding them, senior Commerce Department officials told Reuters. But the Chinese company admitted in March that while it had fired the four senior employees, it had not disciplined or reduced bonuses to the 35 others.

ZTE "provided information back to us basically admitting that they had made these false statements," said a senior department official. "That was in response to the US asking for the information."

ZTE officials did not immediately respond to requests for comment from Reuters.

REUTERS