Beijing Warns Washington Over ZTE Punishment

Beijing says it’s ready to protect its "legitimate rights" after US authorities punished a mainland telecoms equipment maker over a case involving exports to Iran and North Korea.

The Commerce Ministry said on Tuesday it hoped Washington would treat ZTE fairly after US authorities concluded it paid bonuses to employees involved in a scheme to ship equipment to North Korea and Iran instead of disciplining them as it promised in 2017.

The US Commerce Department on Monday barred ZTE, one of China's most prominent technology companies, for seven years from importing American components.

The Commerce Ministry said Beijing will "stand ready to take necessary measures to safeguard the legitimate rights and interests of Chinese companies".

ZTE halted trading of its shares in Hong Kong and Shenzhen on Tuesday following the announcement.

In a statement on its web site, the company said it was "assessing the possible impact of the incident". Before Tuesday's open, ZTE said it would halt trading "pending the release of an inside information announcement".

Following an investigation into the illegal sale of goods to Iran and North Korea, the company pleaded guilty in March 2017 to unlawful exports and was hit with $1.2 billion in fines, the largest criminal penalty in US history in an export control case.

But US Commerce Department investigators said it made additional false statements multiple times about having taken actions against the employees responsible, when it had not.

The five-year US government investigation into ZTE's actions was first revealed in March 2016.

From January 2010 to March 2016, the company shipped $32 million of US cellular network equipment to Iran, and made 283 shipments of cell phones to North Korea, with the full knowledge of the highest levels of company management, officials said.

ZTE used third-party companies to hide the export of US components to the sanctioned countries, and then hid the information by "sanitising databases" with information on the sales. (AP, AFP)

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