The United States Department of Commerce is once again sanctioning Chinese smartphone and telecom equipment maker ZTE over the company’s imports to Iran that broke certain trade embargoes imposed on the Asian country, Reuters reports. While ZTE was already handed an $890 million fine due to its transgressions to which it pleaded guilty last year, U.S. suppliers have now been forbidden from selling any components to the firm as part of a new penalty meant to sanction the company over not adhering to the terms of its 2017 settlement. ZTE originally agreed to dismiss four senior officials and discipline 35 others with either reprimands or smaller bonuses but admitted to not doing the latter when the Commerce Department inquired about the matter last month.
The new sanction applies over a period of seven years and may be revisited once ZTE disciplines the employees in question, all of whom are assumed to have been involved in the company’s Iran operations which placed it on the Commerce Department’s radar in the first place. ZTE is allowed to appeal the decision and ask for a reprieve, with both options being likely courses of action for the company. The firm is presently also being targeted by two bills — H.R.4747 and S.2391 — seeking to prevent the federal government from purchasing its equipment, with the same legislation seeking to put a stop to any major stateside ambitions of Huawei and other China-based firms. ZTE is a publicly traded company whose majority stake is owned by Beijing itself, though the OEM has still been able to sell its smartphones through national wireless carriers in the United States in recent times, unlike Huawei.
Last year’s penalty issued by the U.S. government saw ZTE’s annual performance stumble, with the company now hoping to bounce back over the course of 2018, largely due to its ongoing 5G projects that it’s pursuing across the globe. Washington remains unwilling to allow ZTE, Huawei, or other entities with any direct ties to Beijing contribute to stateside 5G deployment, citing national security concerns. The new sanction will also prevent ZTE from purchasing Snapdragon chips from Qualcomm, thus significantly inhibiting its smartphone operations.