The U.S. Commerce Department is blocking Chinese telecommunications giant ZTE Corp. from importing American components for seven years, accusing the company of misleading U.S. regulators after it settled charges of violating sanctions against North Korea and Iran.
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Shenzhen-based ZTE agreed in March 2017 to plead guilty and pay $1.19 billion for illegally shipping telecommunications equipment to North Korea and Iran. ZTE promised to discipline employees involved in the scheme.
But Commerce said Monday that ZTE paid full bonuses to several of those involved, then lied about it.
"ZTE misled the Department of Commerce. Instead of reprimanding ZTE staff and senior management, ZTE rewarded them," Commerce Secretary Wilbur Ross said. "This egregious behavior cannot be ignored."
Commerce officials said the sanctions were unrelated to ongoing disputes over China's aggressive attempts to obtain U.S. technology and overproduction of steel and aluminum.
The ZTE news drove down stocks in companies that stood to lose business. In early afternoon trading, Acacia Communications shares were down nearly 35 percent, Oclaro Inc.'s nearly 13 percent and Lumentum Holdings' almost 7 percent.
AP Markets Writer Marley Jay contributed to this story