CHINESE TELECOMS OUTFIT ZTE has halted trading after was suspended from the UK and cut off from US suppliers.
On Monday, the UK's National Cyber Security Centre (NCSC) warned UK telecoms firms against using equipment from ZTE due to "national security" concerns.
Ian Levy, technical director at the NCSC, wrote to UK telcos, ZTE and Ofcom warning that "the use of ZTE equipment or services within existing telecommunications infrastructure would present risk to UK national security that could not be mitigated effectively or practicably," adding that it would be "impossible" to manage the risks posed if ZTE equipment was deployed at scale
Just hours later, US manufacturers were barred from selling components to ZTE as part of a seven-year ban imposed by the US Department of Commerce.
The ban comes after ZTE violated an agreement that was reached after it was caught illegally shipping US technology to Iran and North Korea. As part of the agreement, ZTE said it would dismiss four members of senior staff to discipline 35 more.
However, last month, the company admitted it had not taken action against the 35 additional members of staff.
"Instead of reprimanding ZTE staff and senior management, ZTE rewarded them. This egregious behaviour cannot be ignored," said Wilbur Ross, the US secretary of commerce.
According to Reuters, US manufacturers provide up to a third of the components used in ZTE's network equipment and smartphones, so this seven-year-ban could have a disastrous effect on the company's business.
ZTE halted trading of its shares in Hong Kong and Shenzhen on Tuesday following the announcement of the US ban.
On its website, the company said: "ZTE is aware of the denial order activated by the United States Department of Commerce. At present, the company is assessing the full range of potential implications that this event has on the company and is communicating with relevant parties proactively in order to respond accordingly." µ
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