The U.S. Department of Commerce has banned American companies from selling components to ZTE for seven years after breaking an agreement reached after it was caught illegally shipping goods to Iran.
But instead of punishing those involved, "ZTE paid full bonuses to employees that had engaged in illegal conduct, and failed to issue letters of reprimand", the Commerce Department said in a statement.
Denying ZTE export privileges prevents the company from "participating in any way in any transaction" subject to the US government's Export Administration Regulations, which govern sales of sensitive technology overseas. For more on this, read the full Reuters report here.
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.
The West warned telecoms operators not to use ZTE equipment because its state ownership raised security fears.
ZTE agreed in March of previous year to plead guilty and pay as much as $1.2 billion for violating USA laws restricting sale of American technology to Iran. -China tensions over trade between the world's two biggest economies. "This egregious behaviour can not be ignored", said Wilbur Ross, the USA secretary of commerce.
Heavy rain forecast for today
Temperatures Sunday morning will drop into the mid-40s with wind chills likely threatening the upper 30s in a few spots. If it were able to slow down by a few hours, the heavier downpours might hold off until late morning or afternoon.
"ZTE acknowledges the mistakes it made, takes responsibility for them, and remains committed to positive change in the company", ZTE's Chairman and Chief Executive Officer Zhao Xianming said at the time.
The ban on supplying ZTE comes two months after two Republican senators introduced legislation to block the USA government from buying or leasing telecommunications equipment from ZTE or Huawei, citing concern the companies would use their access to spy on US officials.
USA firms are also likely to get caught in the crossfire, with the fallout set to hit Qualcomm Inc, which provides the lion's share of chips inside ZTE smartphones.
That's the position Acacia Communications Inc.
In a letter seen by the Financial Times, NCSC technical director Ian Levy claims that "the use of ZTE equipment or services within existing telecommunications infrastructure would present risk to United Kingdom national security that could not be mitigated effectively or practicably".
For ZTE itself, the latest US action means one of the world's top makers of smartphones and communications gear will no longer be able to buy technology from American suppliers, including components central to its products. Oclaro generates about between 10% and 15% of revenue from both Huawei and ZTE and gets another 10% from Nokia.
ZTE has sold handset devices to USA mobile carriers AT&T Inc, T-Mobile US Inc and Sprint Corp.