Commerce Department bans US exports to China’s ZTE

ZTE’s Axon M, a phone that uses chips from the US’s Qualcomm and Gorilla Glass.

Josh Miller/CNET

ZTE’s troubles with the US just got worse, as the US government announced an export ban to the Chinese phone company. 

American companies like Qualcomm and Dolby will not be able to sell their components to ZTE for up to seven years, after the Chinese phone maker allegedly violated terms of a sanctions agreement from last March, Bureau of Industry and Security officials told CNET. 

The ban comes after ZTE pleaded guilty in 2017 for illegally shipping US equipment to Iran and North Korea and agreed to pay up to $1.2 billion in penalties. Part of the settlement required ZTE to take actions against employees who were a part of the violations. 

The Department of Commerce said ZTE officials lied about reprimanding the employees, and even gave some of them full bonuses.

“Instead of reprimanding ZTE staff and senior management, ZTE rewarded them. This egregious behavior cannot be ignored,” Commerce Secretary Wilbur Ross said in a statement. 

ZTE did not respond to a request for comment. 

ZTE was supposed to fire four senior employees and discipline 35 others, whether by reducing their bonuses or issuing them a letter of reprimand. BIS officials said the Chinese company had fired the four senior staffers, but had taken no action against the other 35 employees.

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