ZTE suspends trading on stock market following United States and UK bans

ZTE suspends trading on stock market following United States and UK bans

"The UK telecommunications network already contains a significant amount of equipment supplied by Huawei, also a Chinese equipment manufacturer".

"NCSC assess that the national security risks arising from the use of ZTE equipment or services within the context of the existing United Kingdom telecommunications infrastructure can not be mitigated".

ZTE's failure to keep to its agreement resulted in the US Department of Commerce announcing yesterday that all American companies are banned from selling components to ZTE for a period of 7 years.

The company's initial guilty plea was met with up to $1.2 billion penalties and fines, along with the dismissal of four senior employees, along with more fallout for lower-level employees.

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The U.S. action could be catastrophic for ZTE since American companies are estimated to provide 25 percent to 30 percent of the components used in ZTE's equipment, which includes smartphones and gear to build telecommunications networks. "Instead of reprimanding ZTE staff and senior management, ZTE rewarded them. Many banks and companies even outside the USA are not going to want to deal with them", said Eric Hirschhorn, a former US undersecretary of commerce who was heavily involved in the case. ZTE aims to launch a 5G smartphone in U.S. by early 2019, and is relying on sales of next-generation 5G network equipment for further growth.

The U.S. Federal Communication Commission on Tuesday plans to consider a ban on the networking equipment from the companies of ZTE and Huawei.

Following a report in the UK's Financial Times newspaper on Monday, the UK's National Cyber Security Centre (NCSC) published a brief statement on its website describing ZTE Corp.

As U.S. concerns about safeguarding its chip technology and cutting its trade deficit grow, the tech sector has become a flashpoint in the broader battle about trade and economic policy, with U.S. President Donald Trump accusing Chinese firms of intellectual property theft for years.

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According to reports, part of the deal ZTE had made with the US government was that it would not give bonuses to employees who had acted illegally in the past, but it failed to follow through on that promise.

Mr Trump has repeatedly accused Beijing of "manipulating its currency", tweeting: "Russia and China are playing the Currency Devaluation game as the US keeps raising interest rates".

ZTE has sold handset devices to USA mobile carriers AT&T Inc, T-Mobile US Inc and Sprint Corp. It's also illegal for other businesses or individuals to participate in transactions with a company that has been denied export privileges, according to the department.

The first accusations against ZTE were for "conspiring to violate USA sanctions by illegally sending U.S. goods and technology to Iran", so the Chinese company had to pay $1.2 billion.

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