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Key Telstra Partner Cries “Foul” Over Bans

ZTE a key partner of Telstra has cried “foul” after the US administration banned US companies from supplying components to the Chinese Company for seven years a move that could force Telstra to find a bew smartphone supplier.

Currently Telstra is ranging nine ZTE made models in their smartphone and housebrand ranges.

On Friday the U.S. Commerce Department granted ZTE’s request to submit more evidence as to why the Company should not face bans that could see them denied access to Google Android software, Dolby sound processors, as well as Qualcom processors.

The basis of the ban was because ZTE had broken a settlement agreement with repeated false statements.

The action was sparked by ZTE’s violation of an agreement that was reached after it was caught illegally shipping U.S. goods to Iran.

According to Commerce regulations, there is no appeals process, but the agency has “exercised discretion” to let ZTE present additional evidence through an “informal procedure,” the senior official said.

The ban is the result of ZTE’s failure to comply with an agreement with the U.S. government after it pleaded guilty last year in federal court in Texas to conspiring to violate U.S. sanctions by illegally shipping U.S. goods and technology to Iran.

The company paid $890 million in fines and penalties, with an additional penalty of $300 million that could be imposed.

Reuters said that as part of the agreement, Shenzhen-based ZTE promised to dismiss four senior employees and discipline 35 others by either reducing their bonuses or reprimanding them, senior Commerce Department officials told Reuters.

But the Chinese company admitted in March that while it had fired the four senior employees, it had not disciplined or reduced bonuses to the 35 others.

Under terms of the ban, U.S. companies cannot export prohibited goods, such as chip sets, directly to ZTE or via another country, beginning immediately.

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