Over the past few months, information surfaced that indicated that ZTE had been selling banned US telecommunications equipment to Iran. Digging in further, it appears that ZTE had plans to ship even more US computer equipment to Iran and was planning on covering up the operation by shredding all evidence related to the sales.
Seeing as you are reading this article, the plan did not go as intended and ZTE was caught in the act. Because of this CISCO, whose equipment was initially sold to Iran, has cut all ties with ZTE and many other US companies are now performing internal assessments to see if their equipment has been sold too. Seeing as ZTE has willfully violated sales bans placed upon Iran, Congress is now wanting to shut ZTE and Huawei out of US markets because of state influence. The report states:
The U.S. House of Representatives" Intelligence Committee said in a draft of a report to be released Monday that ZTE and fellow Chinese telecom equipment maker Huawei Technologies Co. Ltd should be shut out of the U.S. market because potential Chinese state influence on them poses a security threat. Both companies deny the allegation.
ZTE and Huawei are both providers of cell phones (and other communications equipment) that are sold here in the states and are typically a low cost mobile phone solution. If a sales ban is put in place, it would likely do significant harm to ZTE and Huawei"s bottom line.
Source: Reuters