The Department of Commerce announced today that all American companies are now banned from selling components to ZTE, due to the company violating the terms of the sanctions case.
The Chinese company, which sells smartphones in the United States, pleaded guilty previous year in federal court in Texas for conspiring to violate US sanctions by illegally shipping USA goods and technology to Iran. After the USA placed export restrictions on ZTE in 2016 for Iran sanctions violations, the China's Ministry of Commerce and Foreign Ministry criticized the decision. The DOC, however, contends that ZTE failed to significantly penalize those employees.
Reuters quotes a senior department official who said that the company "provided information back to us basically admitting that they had made these false statements". You can find the Department of Commerce's announcement here. Instead of reprimanding ZTE staff and senior management, ZTE rewarded them. "This egregious behavior can not be ignored", Secretary Ross said.
Trump on Monday accused China along with Russian Federation of devaluing their currencies, opening a new front in his argument that foreign governments are exploiting the U.S.
It had also promised to fire four senior employees and reprimand 35 others as part of the agreement but ZTE admitted in March that while it did fire the four employees, it didn't reprimand the others. ZTE paid almost $900 million in fines and fired multiple employees in accordance with the court.
ZTE didn't respond to calls seeking comment that were made after business hours in China.
The official said there is no "off ramp" for the company to seek a reversal of the blockade.
In March 2017, ZTE agreed to a combined civil and criminal penalty and forfeiture of $1.19 billion after illegally shipping telecommunications equipment to Iran and North Korea, making false statements, and obstructing justice including through preventing disclosure to and affirmatively misleading the U.S. Government.
A five-year federal investigation found last year that ZTE had conspired to evade USA embargoes by buying US components, incorporating them into ZTE equipment and illegally shipping them to Iran. Today, though, the United States government has banned USA companies from selling to the Chinese company.