The United States blocked Chinese telecommunications equipment manufacturer ZTE Corp. by exporting sensitive technology from the United States, alleging that the company made false statements to US officials.
The Department of Commerce determined that ZTE made false statements to the Bureau of Industry and Security in 2016 and 2017 related to "disciplinary actions it was taking or had already taken," the department said in a statement Monday.
ZTE did not disclose the fact that it paid full bonuses to employees who engaged in illegal conduct and did not issue letters of caution, the department said.  "ZTE cheated the Commerce Department: Instead of reprimanding the ZTE staff and senior management, ZTE rewarded them, this atrocious behavior can not be ignored," Commerce Secretary Wilbur Ross said in the statement.
The ZTE denial order comes amid tensions between the United States and China that have raised concerns of a trade war between the two largest economies in the world. President Donald Trump has threatened tariffs on $ 150 billion in Chinese imports in retaliation for alleged violations of intellectual property rights, while Beijing has vowed to retaliate against everything from American soybeans to airplanes.
Trump accused China and Russia of devaluing their currencies, opening a new front in their argument that foreign governments are exploiting the United States
A senior official of the Department of Trade and Security Department of Commerce told reporters that ZTE's decision was not related to the administration's threats to impose tariffs on Chinese imports, and said the actions against the Chinese company are part of an investigation. The official, who spoke on condition of anonymity, said the timing of ZTE's action was unfortunate because it might seem related to US steps to stop the alleged theft of intellectual property.
The agreement required that the company pay $ 892 million in fines and forfeiture and that it be subject to an additional $ 300 million in fines if it violates the terms of the agreement. It was the largest criminal fine for the Department of Justice in a case of export control or sanctions.
"ZTE recognizes the mistakes made, takes responsibility for them and remains committed to a positive change in the company," ZTE President and CEO Officer Zhao Xianming said at the time. The company is making personnel changes and instituting new compliance procedures, he said.
Denying ZTE export privileges prevents the company from "participating in any way in any transaction" subject to the US government's export administration regulations. UU., That govern sales of sensitive technology abroad. It is also illegal for other companies or individuals to participate in transactions with a company that has been denied export privileges, according to the department.
ZTE did not respond to calls for comments that were made after business hours in China.