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ZTE pose a threat to United Kingdom national security warns the NCSC

ZTE pose a threat to United Kingdom national security warns the NCSC

United States authorities issued an order today barring U.S. exports of sensitive technology to Chinese telecom giant ZTE because of false statements made during an investigation into its illegal sale of goods to Iran and North Korea. "Many banks and companies even outside the U.S. are not going to want to deal with them", said Eric Hirschhorn, a former U.S. Undersecretary of Commerce who was heavily involved in the case.

Commerce said ZTE's actions "demonstrate a pattern of deception, false statements, and repeated violations" and that "ZTE still can not be relied upon to make truthful statements, even in the course of dealings with US law enforcement agencies, and even with the prospect of the imposition of a $300 million penalty and/or a seven-year denial order".

The FT's report notes that Levy's letter also cites a recent settlement between ZTE and U.S. officials, in which the Chinese firm agreed to pay a $1.2bn fines for violating USA sanctions on North Korea and Iran. The Chinese company used a series of shell companies to sell its products in Iran, and after pleading guilty, it promised to terminate four senior employees and to discipline 35 others.

Unlike Huawei, ZTE is a state-owned company, which seems to raise more questions even for the United Kingdom government, which hasn't banned Huawei hardware yet.

Shares of big U.S. ZTE suppliers fell sharply on the Commerce ban.

This time previous year, Chinese electronics giant ZTE pled guilty to violating sanctions on Iran and North Korea. "It's certainly going to make it very hard for them to produce and will have a potentially significant short and long-term negative impact on the company". The company can resume purchasing these components from the US after seven years.

ZTE has sold handset devices to USA mobile carriers AT&T Inc, T-Mobile US Inc and Sprint Corp.

The U.S. action against ZTE is likely to further exacerbate current tensions between Washington and Beijing over trade.

The U.S. government had allowed the company continued access to the U.S. market under the 2017 agreement.

According to the Ross, Jr., the order is being issued in response to ZTE illegally sending telecommunications equipment to North Korea and Iran.

The Commerce Department said in a statement it was revoking ZTE's export license.