ZTE banned from using US-based hardware or software in its products

US bans American companies from selling components to Chinese phone maker ZTE

US companies banned from selling components to ZTE

At the CES 2018, Huawei is set to unveil the Mate 10 Pro smartphone that will be sold by the AT&T. "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. Though there is no official confirmation, the AT&T is said to have stepped back only the U.S government intervention.

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 USA law enforcement agencies, and even with the prospect of the imposition of a $300 million penalty and/or a seven-year denial order". Now, it seems that ZTE will have to resort to companies like MediaTek for SoCs to use in its handsets.

According to the letter ZTE is a Chinese state-owned business and that new Chinese laws have been introduced enabling the state to exert influence over companies and individuals with "wide ranging powers of compulsion". ZTE has been buying the hardware from the USA companies and using in its products which are later shipped to Iran and North Korea. This probation period has now been violated after the three instances of false statements were unearthed. As a result ZTE paid up to $1.2 billion (£837 million) in fines.

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The US Department of Commerce's Bureau of Industry and Security (BIS) has imposed a denial of export privileges order against ZTE, after coming to the conclusion it lied to the committee on numerous occasions. However, it can't offer Google services like Google Play, Maps, and Gmail. A ban of this magnitude is effectively a death sentence for ZTE's U.S. smartphone operations, so this could very well be an end of an era.

On top of the false statements regarding USA 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. The biggest stinging point of this ban lies in ZTE's loss of access to Qualcomm components, including the Snapdragon line of SoCs. We are yet to receive any official statement from ZTE over the latest sanctions by the United States government.

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