ZTE says assessing implications of United States decision

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The U.S. Department of Commerce slapped a seven-year ban on sales to ZTE on Monday for breaking terms of an agreement reached last year 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.

"In March 2017, ZTE agreed to a combined civil and criminal penalty and forfeiture of $1.19 billion after illegally shipping telecommunications equipment to Iran and North Korea, making false statements, and obstructing justice including through preventing disclosure to and affirmatively misleading the U.S. government", claimed the Department of Commerce in a statement.

"If the issue can not be solved smoothly and immediately, we think that ZTE will face tremendous disaster and would be forced to scale back on its smartphone business, not only in the USA, but also in other markets", said Strategy Analytics analyst Woody Oh.

A spokesperson for BT told the Financial Times: "BT takes the security of the UK's critical national infrastructure very seriously and has a robust testing regime in place to ensure that the equipment from all suppliers used in our network remains secure".

The US government has also banned US companies from working with ZTE due to a violation of sanctions and imposed a fine of $1.2 billion (£837 million) in 2017.

He first threatened to name China as a "currency manipulator" during his first days of office but reversed his position after his first three months in office and took no action.

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"ZTE misled the Department of Commerce", Commerce Secretary Wilbur L. Ross in a press release.

ZTE uses a number of USA suppliers, including Intel, Microsoft, Micron Technology and Qualcomm.

In conclusion, the measures taken by the USA government against the Chinese manufacturer will also reflect on the latter's smartphones production and their quality, subsequently, since now ZTE can't buy Qualcomm chipsets anymore, while, until now, up to 30% of the components used by ZTE were made by USA companies.

As U.S. concerns about safeguarding its chip technology and cutting its trade deficit grow, the tech sector has become a flashpoint in the broader battle about trade and economic policy, with U.S. President Donald Trump accusing Chinese firms of intellectual property theft for years.

That's the position Acacia Communications Inc. Oclaro generates about between 10% and 15% of revenue from both Huawei and ZTE and gets another 10% from Nokia.

"NCSC assess that the national security risks arising from the use of ZTE equipment or services within the context of the existing United Kingdom telecommunications infrastructure can not be mitigated".

Other optical component companies also slid, with Lumentum Holdings Inc falling 8.9 percent and Finisar Corp dropping 4 percent.

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