DOJ is investigating Huawei for violating Iran sanctions

ZTE says US ban will 'severely impact' its survival and partnerships

In 2016, the Commerce Department made documents public that showed ZTE's misconduct and also revealed how a second company, identified only as F7, had successfully evaded USA export controls. Under the ban, the China-based smartphone maker can't get hold of Qualcomm chips and it stands to lose its license to use Android.

On April 20, ZTE said that the U.S ban was unfair and threatens its survival. It started years ago with the accusation that the Chinese government uses companies like Huawei and ZTE to spy on other countries like the US. The company is supposedly being investigated by the Department of Justice for violating sanctions against Iran; something that could lead to severe penalties and a possible ban. ZTE is now facing a seven year supply ban for selling its devices in the Middle Eastern country. Today's report says that the Justice Department investigation deals with allegations that Huawei violated US sanctions against Iran.

If Huawei is found to have violated sanctions, it could be hit with major penalties including fines, the forced use of a corporate monitor, and even USA technology export bans.

US authorities have subpoenaed Huawei seeking information related to possible export and sanctions violations, two sources said. Ciena and Infinera, of course, compete with both Huawei and ZTE in global markets (except China).

Both companies also have been under scrutiny by USA lawmakers over cybersecurity concerns. ZTE agreed to pay $892 million in fines and forfeitures in the Justice Department deal, at the time the largest US criminal fine against a Chinese company, with additional fines if it failed to comply with the deal. ZTE had previously reached a settlement with the Commerce Department's Bureau of Industry and Security, and pleaded guilty as part of a sanctions-violations agreement with the Justice Department.

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