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The Department of Justice (DOJ) is investigating Chinese phone-maker Huawei over whether it violated USA sanctions against Iran, The Wall Street Journal reported on Wednesday.

Even before the export ban on ZTE, the US Congress barred the Pentagon from buying equipment from ZTE and Huawei Technologies.

Several ZTE vendors watched their stock prices stumble in recent days, collateral damage after the Commerce Department put in place a seven-year ban, as national-security and trade-related tensions flare up between the USA and China.

The company is taking steps to suspend affected transactions as a result of the ban and is assessing the impact of these developments on Acacia, it said in a statement.

Huawei, the third largest smartphone maker in the world, said that it complies with "all applicable laws and regulations where it operates, including the applicable export control and sanction laws and regulations of the UN, US and European Union". ZTE, which has also been linked to the Chinese government and possible espionage issues, was found guilty a year ago of sending goods and services to Iran and North Korea, and fined $1.19 billion.

Chinese foreign ministry spokeswoman Hua Chunying said she had seen the report.

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This suspicion of possible espionage has lead to the collapse of a deal that would being Huawei devices to United States telcos.

In February, Senator Richard Burr, the Republican chairman of the US Senate Intelligence Committee, cited concerns about the spread of Chinese technologies in the United States, which he called "counterintelligence and information security risks that come pre-packaged with the goods and services of certain overseas vendors".

The US Department of Commerce banned US exports to the company after it found that ZTE violated an agreement.

Since April 2016, ZTE Corporation (hereinafter referred to as "ZTE") has continuously reflected on lessons from its past experience in Export Control Compliance and has attached great importance to Export Control Compliance. 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 New York Times has reported that the company has been subpoenaed by the Commerce and Treasury Departments over alleged violations of Iran and North Korea sanctions.

In a recent statement to the Hong Kong stock exchange, ZTE said that it was "making active communications with relevant parties and seeking a solution" to the U.S export denial order.


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