U.S. and United Kingdom suppliers banned from exporting to Chinese electronics giant ZTE

NCSC warns UK telcos against ZTE equipment due to 'national security' concerns

NCSC warns UK telcos against ZTE equipment due to 'national security' concerns

In conclusion, the measures taken by the USA government against the Chinese manufacturer will also reflect on the latter's smartphones production and their quality, subsequently, since now ZTE can't buy Qualcomm chipsets anymore, while, until now, up to 30% of the components used by ZTE were made by USA companies.

Separately, the U.K.'s National Cyber Security Centre warned the country's telecommunications companies and regulator that national security risks from using ZTE equipment and services "cannot be mitigated".

The commerce Department also reported that the employees who were involved in the above mentioned illegal act were paid full bonuses by the company ZTE corp. even failed to issue letters of reprimand for those employees and also lied about the practices to USA authorities.

The ban comes after ZTE violated an agreement that was reached after it was caught illegally shipping United States technology to Iran and North Korea.

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.

He first threatened to name China as a "currency manipulator" during his first days of office but reversed his position after his first three months in office and took no action.

As part of the agreement, Shenzhen-based ZTE promised to dismiss four senior employees and discipline 35 others by either reducing their bonuses or reprimanding them, senior USA officials told Reuters.

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"ZTE misled the Department of Commerce", Ross said in a statement.

The ban - which is in full effect - means American electronics companies such as Qualcomm will not be able supply the company with its processors and hardware for a period of up to seven years.

"This will be devastating to the company, given their reliance on US products and software", Douglas Jacobson, an exports control lawyer who represents suppliers to ZTE, said of the ban on supplying the company.

Similar sentiments were offered by U.S. Republican representative Robert Pittenger, who told Reuters, "China does not play by our rules, and we must be vigilant against Chinese threats to both our economic security and national security". US President Donald Trump has already imposed tariffs on Chinese imports in recent weeks, and there is growing concern that China is racing ahead of the US in the all-important technology sector.

USA firms are also likely to get caught in the crossfire, with the fallout set to hit Qualcomm Inc, which provides the lion's share of chips inside ZTE smartphones. ZTE may have to either buy from a competitor or get chips from a Taiwanese company whose products generally lag those of its USA rival's in performance.

ZTE's settlement with the USA followed a multiyear investigation into claims that it violated US sanctions against Iran and North Korea by selling electronics to those countries. "Huawei is closely associated with the Chinese government, and Huawei and ZTE strongly dislike each other".

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