ZTE: U.S. restrictions put a company on the brink of survival
The United States last week imposed a 7-year ban on sale by American companies of components for ZTE, stating that Chinese manufacturer has violated the settlement agreement and made repeated false statements. The move is designed to attack the existing supply chain.
“It is unacceptable that the Bureau of industry and security, U.S. Department of Commerce (BIS) insists on the unfair imposition of harsh punishment on ZTE still to complete the investigation of the facts, said ZTE in its first response since the announcement of the ban. — An injunction against not only seriously affect the survival and development of ZTE, but also to the detriment of all partners, including a large number of customers in the United States.”
ZTE stated that it considers regulatory compliance a cornerstone of its strategy, adding that in 2017 it has invested 50 million dollars in projects to export control and is planning to invest more this year. Recall: two years ago, ZTE has come under sanctions for violations of the ban on the export of American technology to Iran. The company has agreed to pay a fine in the amount of $890 million, to dismiss four of the perpetrators in the incident, senior managers, and also to punish the 35 other employees, but did not escape the new, much more serious punishment than that imposed before a two-week ban.
A senior official of the Ministry of Commerce told Reuters that a 7-year ban unlikely to be lifted. The U.S. Commerce Department provides an appeal process for companies that want to get out of the sanctions list, but it is unclear whether it is possible for ZTE, because her case had already been the subject of legislative proceedings. In addition, ZTE is unlikely to quickly achieve the lifting of sanctions, because its application needs to be approved by the BIS — the same body that issued the ban. ZTE has said it will not abandon efforts to resolve problems through negotiations and intends to resort to legal action to protect their rights and interests.
The ban has increased the tension between China and the United States, threatening each other with losses of tens of billions of dollars by the introduction of protective tariffs on imports. There are fears of a full-scale trade war. In China, there is a Patriotic response: the affected company supports social networks, and most of the media indicate that the problems of the ZTE due to too much China’s dependence on foreign semiconductor products.
Meanwhile, the American government is considering emergency law restricting the possibility of Chinese investment in advanced technology USA.