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

Sergio Conner
April 16, 2018

This follows on from the USA banning American companies from selling to ZTE for seven years following violations against sanctions imposed for illegally shipping United States goods to Iran. While the company went ahead with the launch, there is no announcement about the AT&T partnership.

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". It also paid $890 million in fines. 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.

Now, the United States government has banned ZTE from using the hardware or software from the American companies. With the ban, none of the carriers are allowed to sell the ZTE smartphones.

Douglas Jacobson, an exports control lawyer who represents suppliers to ZTE, called the ban highly unusual and said it would severely affect the company.

While ZTE can continue to sell its products in the United States, being unable to use parts from Qualcomm, Intel, and other USA companies could prove to be devastating to the firm. "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".

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The company was supposed to take disciplinary action against multiple individuals at ZTE.

"We believe such a response could be similar across the entire USA component supply chain".

On top of the false statements regarding U.S. components, Ross also claims ZTE did not live up to promises when it came to firing or disciplining employees who were directly involved with the initial complaint. While a few reports say, the company might actually sell Android-powered devices outside of the USA as it comes with open source software.

From January 2010 to March 2016, the company shipped $32 million in U.S. cellular network equipment to Iran, and made 283 shipments of cell phones to North Korea, with the full knowledge of the highest levels of company management, officials said.

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