ZTE: U.S. Denial Order Is Unfair, Will ‘Severely Impact’ Company’s Survival

China-based telecom company ZTE Corp. said last week that a move by the U.S. Commerce Department to deny export privileges is unfair and stand to “severely impact” the company’s survival.  

RELATED: ZTE Export Privileges Rescinded 

“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,” ZTE said in a statement released on Friday (April 20). “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 also argued that the order disregards that ZTE has taken measures against the employees who might have been responsible for the incident, it has taken corrective measures, and that a U.S. law firm has been engaged to conduct an independent investigation.  

Last Wednesday (April 18), the U.S. Commerce Department said ZTE had violated the terms of its settlement agreement with the U.S. over illegally shipping telecom equipment to Iran and North Korea and will be blocked from exporting its telecom equipment as a penalty, and, as a result, had denied export privileges to ZTE.  

“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 U.S. companies,” ZTE said, adding that it invested more than $40 million in its export control compliance program, and expects to invest more resources there in 2018.  

ZTE said it intends to resolve the issue through communications and is 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.”