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U.S. bans American companies from selling to China's ZTE

Reuters  |  WASHINGTON 

By and Karen Freifeld

WASHINGTON (Reuters) - The U.S. is banning American companies from selling components to Chinese for seven years for violating the terms of a sanctions violation case, U.S. officials told

The Chinese company pleaded guilty last year in federal court in for conspiring to violate U.S. sanctions by illegally shipping U.S. goods and to It paid $890 million in fines and penalties, with an additional penalty of $300 million that could be imposed.

As part of the agreement, Shenzhen-based promised to dismiss four senior employees and discipline 35 others by either reducing their bonuses or reprimanding them, senior Commerce Department officials told 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.

ZTE "provided information back to us basically admitting that they had made these false statements," said a senior department "That was in response to the U.S. asking for the information."

"We can't trust what they are telling us is truthful," the said. "And in international commerce, truth is pretty important."

ZTE officials did not immediately respond to requests for comment.

A five-year federal investigation found last year that ZTE had conspired to evade U.S. embargoes by buying U.S. components, incorporating them into ZTE equipment and illegally shipping them to

ZTE, which devised elaborate schemes to hide the illegal activity, agreed to plead guilty after the Commerce Department took actions that threatened to cut off its global

The had allowed the company continued access to the U.S. market under the 2017 agreement. American companies are estimated to provide 25 percent to 30 percent of the components used in ZTE's equipment, which includes networking gear and

The U.S. government's investigation into sanctions violations by ZTE followed reports by in 2012 that the company had signed contracts to ship millions of dollars' worth of hardware and software from some of the best known U.S. companies to Iran's largest

(Reporting by and Steve Stecklow; Editing by Jeffrey Benkoe)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Mon, April 16 2018. 18:34 IST
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