YOU ARE AT:5GZTE says U.S ban could affect the survival of the company

ZTE says U.S ban could affect the survival of the company

 

Chinese vendor says the restriction would also affect the interests of some U.S firms

Chinese vendor ZTE said that a U.S. ban on the sale of components and software to the company is unfair and threatens its survival but will also potentially affect the interests of a number of U.S firms.

Earlier this week, the U.S. Department of Commerce’s Bureau of Industry and Security (BIS) banned American companies from selling telecommunications equipment to ZTE after the firm allegedly did not live up to the terms of an agreement that had been worked out after it illegally shipped telecom equipment to Iran and North Korea.

The government’s order, which went into effect immediately, bans American firms from exporting components directly to ZTE or through a third country until March 13, 2025.

“It is unacceptable that BIS insists on unfairly imposing the most severe penalty on ZTE even before the completion of investigation of facts, ignoring the continuous diligent work of ZTE and the progress we have made on export compliance,” ZTE said in a statement.

The company also highlighted that it had invested over $50 million in its export control compliance program and plans to invest more this year.

ZTE also said 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 U.S. companies.”

Some of the U.S companies which could be affected by this decision are Qualcomm, Google and Dolby.

“In any case, ZTE will not give up its efforts to resolve the issue through communication, and we are also determined, if necessary, to take judicial measures to protect the legal rights and interests of our company, our employees and our shareholders, and to fulfill obligations and take responsibilities to our global customers, end-users, partners and suppliers,” the Chinese vendor said.

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

“We’re going to have to see how this unfolds. But there is no provision currently for that to occur,” the official was quoted as saying.

ZTE’s business could be heavily impacted if the company fails to reach an agreement with the U.S government over the ban, Earl Lum of EJL Wireless Research recently told RCR Wireless News.

“If ZTE can work out a deal, the question is how long will it take and how much more money will they need to pay. If it takes six months or more, then their business will be heavily impacted,” Lum said.

ABOUT AUTHOR

Juan Pedro Tomás
Juan Pedro Tomás
Juan Pedro covers Global Carriers and Global Enterprise IoT. Prior to RCR, Juan Pedro worked for Business News Americas, covering telecoms and IT news in the Latin American markets. He also worked for Telecompaper as their Regional Editor for Latin America and Asia/Pacific. Juan Pedro has also contributed to Latin Trade magazine as the publication's correspondent in Argentina and with political risk consultancy firm Exclusive Analysis, writing reports and providing political and economic information from certain Latin American markets. He has a degree in International Relations and a master in Journalism and is married with two kids.

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