ZTE protests 'unfair' U.S. penalty, says it's seeking solution

ZTE protests 'unfair' U.S. penalty, says it's seeking solution

It states that the decision will "severely impact the survival and development of ZTE", which sounds rather dramatic but also highlights just how reliant the Chinese firm is on component technology from USA firms.

The company contends that the U.S. Bureau of Industry and Security "ignored" its "diligent work" and progress it has made in complying with the law, calling the punishment, "unfair".

China's Ministry of Commerce (MOC) said Thursday that the usa action against ZTE will damage itself. It pointed out that last year alone it spent more than $50 million on its export compliance program, and is planning to boost that level this year.

ZTE, just like many other phone manufacturers, uses hardware from Snapdragon chipset developer Qualcomm, and Android software from Google, both of which it could lose access to under this ban.

However, as the DOC enacted the ban because ZTE did not reduce bonuses and failed to reprimand 35 key employees by the deadline they were given, the company may not have much of a leg upon which their argument can stand. ZTE is crying foul and saying that the DOC is being unfair in its action and activated the ban without gathering facts.

"Since April 2016, ZTE Corp. has continuously reflected on lessons from its past experience in export control compliance and has attached great importance to export control compliance", it said.

It eventually pleaded guilty at the time, agreeing to pay $900 million in fines for violating us sanctions. It would also handicap the mainland's ability to build the world's largest 5G network by the end of this decade. China already favours local suppliers and the ban could give it reason to accelerate their development to ensure ZTE remains viable.

ZTE said it will explore legal measures to protect the legal rights and interests of the company. ZTE, however, claims in a statement that it is boosting export compliance and needs more time to investigate.

"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 United States companies".

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

China is set to implement a set of new national standards on compliance management systems on July 1, as the government steps up efforts to monitor companies' overseas operations and strengthen their compliance management to curb risk.

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