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Tuesday, 17 April 2018 10:24

US export ban on ZTE; UK advises against use of firm's equipment

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The US and the UK have moved against the Chinese telecommunications vendor ZTE, with the US imposing an export ban on the company and the UK warning against the use of ZTE equipment in its telecommunications infrastructure.

A statement from the US Commerce Department said the ban was imposed because of false statements made by the company during talks in 2016 over a charge of shipping telco equipment to Iran and North Korea. As a penalty, US firms cannot sell parts to ZTE for seven years.

ZTE was fined US$1.19 billion in March 2017 and also agreed to a seven-year suspended export ban which would take effect if it was found to be in violation of the Export Administration Regulations.

Subsequently, the Department of Commerce claims to have found that statements made by ZTE to the Bureau of Industry and Security were false.

“ZTE made false statements to the US Government when they were originally caught and put on the Entity List, made false statements during the reprieve it was given, and made false statements again during its probation.” Commerce Secretary Wilbur Ross said.

These false statements covered up the fact that ZTE paid full bonuses to employees that had engaged in illegal conduct, and failed to issue letters of reprimand.

“ZTE misled the Department of Commerce. Instead of reprimanding ZTE staff and senior management, ZTE rewarded them. This egregious behaviour cannot be ignored,” Ross added.

In the UK, Dr Ian Levy, technical director of the National Cyber Security Centre, wrote to telecommunications organisations saying: "NCSC assesses that the national security risks arising from the use of ZTE equipment or services within the context of the existing UK telecommunications infrastructure cannot be mitigated."

The letter further said that using network equipment or services from ZTE would have a “long-term negative effect on the security of the UK”.

“Mitigating the risk of external interference with equipment supplied by a particular vendor depends in significant part on telecommunications equipment being present from other vendors who are not subject to the same risk of external interference.

"The UK telecommunications network already contains a significant amount of equipment supplied by Huawei, also a Chinese equipment manufacturer. Adding in new equipment and services from another Chinese supplier would render our existing mitigations ineffective."

In February, the NCSC reiterated its commitment to working with Huawei, saying it will "continue to benefit" from such collaboration,

The US is also seeking to ban Huawei and ZTE from any further participation in telecommunications networks in the country and also trying to push Australia in the same direction.


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Sam Varghese

Sam Varghese has been writing for iTWire since 2006, a year after the site came into existence. For nearly a decade thereafter, he wrote mostly about free and open source software, based on his own use of this genre of software. Since May 2016, he has been writing across many areas of technology. He has been a journalist for nearly 40 years in India (Indian Express and Deccan Herald), the UAE (Khaleej Times) and Australia (Daily Commercial News (now defunct) and The Age). His personal blog is titled Irregular Expression.

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