Published: Sat, April 21, 2018
Finance | By Kristine Clayton

ZTE lashes out at USA ban, vows to protect company

ZTE lashes out at USA ban, vows to protect company

The statement also points out that the ban "will not only severely impact the survival and development of ZTE, but will also cause damages to all partners of ZTE including a large number of us companies". It also noted the USA agency that conducted the investigation imposed the new ban "even before the completion of investigation of facts, ignoring the continuous diligent work of ZTE and the progress we have made on export compliance".

Today, ZTE said the ban on the sale of parts and software to the company was unfair and threatens its survival.

In their response, ZTE claims that (in spite of the DOC's opinion and ruling) the company has made huge strides toward reconciling their exports to bring them into code with the U.S.'s current embargoes.

The U.S Department of Commerce is not likely to lift the ban on ZTE, Reuters reported, citing a senior official the agency.

ZTE initially responded saying it was assessing the situation, and suspended trading of its Hong Kong- and Shenzhen-listed shares.

ZTE has been working diligently on Export Control Compliance program and has invested tremendous resources in export compliance and has made significant progress since 2016.

According to the USA, this was in violation of a settlement in March 2017 that encompassed ZTE's agreement to a seven-year suspension of export sales if it broke additional conditions, including carrying out disciplinary action against executives responsible for the equipment sale to the two countries. It would also handicap the mainland's ability to build the world's largest 5G network by the end of this decade. "We note that the newly-imposed, 7-year ban is an incredibly harsh punishment It may be possible that the order serves as a starting point for further negotiations between the United States government and ZTE".

The case dates back for at least six years, when Washington began investigating ZTE for selling equipment containing US -made parts to Iran in violation of USA sanctions at that time.

"We can see compliance risk has become a core risk for Chinese firms that join global competition", the trade body said in the proposal dated April 18.

"Refusal orders will not only seriously endanger the survival of ZTE, but also hurt the interests of all ZTE's partners including a large number of USA companies". ZTE chairman Yin Yimin said in a separate internal memo to employees that the company has set up a crisis management team and appealed for calm among its 80,000-strong staff.

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