BUSINESS

U.S. bans American firms from selling to Iran sanctions-breaching Chinese phone maker ZTE

A sign for the ZTE booth is seen at the Mobile World Congress, the world's largest mobile phone trade show, in Barcelona, Spain i 2014. The U.S. Commerce Department is blocking Chinese telecommunications giant ZTE Corp. from importing American components for seven years, accusing the company of misleading U.S. regulators after it settled charges of violating sanctions against North Korea and Iran. | AP

Reuters

Apr 17, 2018

LONDON/NEW YORK –

The U.S. Department of Commerce has banned American companies from selling components to leading Chinese telecom equipment maker ZTE Corp. for seven years for violating the terms of a sanctions violation case, U.S. officials said on Monday.

The U.S. action, first reported by Reuters, could be devastating to ZTE since American companies are estimated to provide 25 percent to 30 percent of the components used in ZTE's equipment, which includes networking gear and smartphones.

The ban is the result of ZTE's failure to comply with an agreement with the U.S. government after it pleaded guilty last year in federal court in Texas to conspiring to violate U.S. sanctions by illegally shipping U.S. goods and technology to Iran.