NCSC advice to telecommunications sector about ZTE
NCSC advice to telecommunications sector about ZTE
US companies banned from selling components to ZTE
16 April, 2018, 22:11
Optical stocks were trading under notable selling pressure Monday morning in reaction to the US government's move to ban American companies from selling their equipment to China's ZTE Corp.
ZTE was accused to circumventing US sanctions on Iran back in 2016.
The false statements allegedly occurred while the United States was investigating ZTE exports to Iran and North Korea, a bit of business which landed the firm in hot water to start with, collecting a $1.2 billion fine in the process, but buying U.S. components, incorporating them into ZTE equipment and shipping them to the countries was not something which was accounted for in the original punishment. On April 16, Secretary of Commerce Wilbur L. Ross, Jr. The official, speaking on the condition of anonymity, said the timing of the ZTE action was unfortunate because it could seem related to USA steps to stop alleged theft of intellectual property. US versions of ZTE phones were found to have a backdoor in 2012.
Shares of optical companies including Lumentum Holdings Inc fell 6.6 percent and Finisar Corp dropped 2.7 percent.
The Commerce Department has determined ZTE made false statements to the Bureau of Industry and Security in 2016 and 2017 related to "senior employee disciplinary actions the company said it was taking or had already taken", the department said in a statement Monday.
ZTE officials did not immediately respond to requests for comment. The UK National Cyber Security Centre (NCSC) believes that the potential national security risks are too significant to be ignored, and that it would be better if UK telcos stopped buying ZTE hardware to avoid future security problems that wouldn't be easily mitigated. It might also be the first steps through the bureaucratic box ticking mission to officially ban ZTE.
ZTE has sold handset devices to USA mobile carriers AT&T Inc, T-Mobile US Inc and Sprint Corp.
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"ZTE misled the Department of Commerce".
The department's action against ZTE also prohibits large American companies like Qualcomm and Micron Technology from selling their chips and components to ZTE, China's largest listed telecommunications equipment supplier.
The U.S. government had allowed the company continued access to the U.S. market under the 2017 agreement.
The U.S. action against ZTE is likely to further exacerbate current tensions between Washington and Beijing over trade.
The new restrictions stem from a January 16 report by a USA monitor appointed by a federal judge in Texas who accepted the guilty plea in March 2017.
Visitors pass in front of the Chinese telecoms equipment group ZTE Corp booth at the Mobile World Congress in Barcelona, Spain, February 26, 2018.
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