Telecommunication companies told not to deal with Chinese manufacturer, while US imposes fresh sanctions for illegal sale of sensitive technology

Britain’s cyber-security watchdog has warned telecommunications companies against dealing with the Chinese manufacturer ZTE, citing “potential risks” to national security.

The US commerce department has imposed a seven-year-ban on companies selling products and services to ZTE – which makes mobile phones and network equipment – alleging it failed to crack down on personnel who sold sensitive US technology to Iran and North Korea. ZTE halted trading of its shares in Hong Kong and Shenzhen on Tuesday following the announcement of the US ban, while Beijing warned it would “safeguard” its companies if necessary.

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In Britain, the National Cyber Security Centre (NCSC) said: “NCSC assess that the national security risks arising from the use of ZTE equipment or services within the context of the existing UK telecommunications infrastructure cannot be mitigated.”

According to the Financial Times, a letter from the NCSC to companies states that the UK telecoms network already contains a “significant amount” of equipment supplied by Huawei, also a Chinese manufacturer. Adding in equipment and services from another Chinese supplier would “render our existing mitigations ineffective”.

ZTE pleaded guilty in March 2017 to illegally shipping US technology to Iran and North Korea. Part of the settlement required ZTE to take action against employees involved in the violations, but instead engaged in a cover-up according to US authorities. “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 .

ZTE works with BT in a research partnership, but the British firm said that did not mean it would lead to a commercial deployment of its technology in the UK.

A spokeswoman told the Financial Times: “BT takes the security of the UK’s critical national infrastructure very seriously and has a robust testing regime in place to ensure that the equipment from all suppliers used in our network remains secure.”

With the Press Association and AFP