China’s ZTE slams US ban, says firm’s survival at risk
hong kong — China’s ZTE said on Friday that a US ban on the sale of parts and software to the company was unfair and threatens its survival, and vowed to safeguard its interests through all legal means.
The United States this week imposed a ban on sales by American companies to ZTE for seven years, saying the Chinese company had broken a settlement agreement with repeated false statements - a move that threatens to cut off its supply chain.
“It is unacceptable that BIS insists on unfairly imposing the most severe penalty on ZTE even before the completion of investigation of facts,” ZTE said in its first response since the ban was announced, referring to the US Commerce Department’s Bureau of Industry and Security. “The Denial Order 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,” ZTE said in a statement.
ZTE said it regards compliance as the cornerstone of its strategy, adding it invested $50 million in export control compliance projects in 2017 and plans to invest more this year.
A senior US Commerce Department official told earlier this week that it is unlikely to lift the ban.
“We’re going to have to see how this unfolds. But there is no provision currently for that to occur,” the official said, who declined to be identified due to the sensitivity of the matter.
The Commerce Department has an appeals process for companies to try to get off the list, but it is unclear whether that would be available to ZTE because the case had been previously subject to a settlement, according to people familiar with the matter.
Even so, ZTE would have little recourse in the near term because appeals would have to be approved by the BIS, the same agency that issued the ban.
Companies must submit appeals to a committee that would issue a ruling within 30 days, according to the agency’s website.
ZTE said it will not give up efforts to solve problems through communication, and it is determined to take judicial measures to protect the legal rights and interests of the company.
A state-backed Chinese trade body said the ZTE case represented a “milestone” for China Inc and highlighted compliance risks its corporate sector is facing.
It urged the Chinese government to speed up implementation of national guidelines on corporate oversight, and go through informal channels and seek leniency with US Congress members to resolve the ZTE case. —