The Commerce Department said it slapped the seven-year export ban on ZTE because the Chinese company lied to American officials about punishing employees who violated USA sanctions on North Korea and Iran.
For its part, China announced on Friday that it had transmitted its "solemn protests to the United States" on this issue during trade talks in Beijing by a high-level American delegation led by Treasury Secretary Steven Mnuchin. The company has said that the ban threatens its existence by cutting off access to USA suppliers of key components like microchips.More news: Iran-Backed Hezbollah Gains Tighter Control Over Lebanon Through "Decisive" Election Victory
The ban on sales to ZTE, which is heavily reliant on imports of USA chips, had threatened to scupper the Chinese firm's smartphone business. Last week Chinese negotiators held trade talks with United States counterparts in Beijing asking them to hear the appeal and take into account efforts to improve its compliance. Unfortunately, ZTE didn't comply but lied they did, leading to the enforcement of the USA exports ban until March 2025. The company relies on USA firms for key smartphone components, including microchips from Qualcomm and glass from Corning. ZTE pleaded guilty to a conspiracy to violate the sanctions, having accepted an $892 million fine and agreed to fire four officials, in addition to disciplining 35 others, either by reprimanding them or withholding their bonuses.
ZTE said in its latest statement, which was filed late Sunday with the Hong Kong stock exchange, that it has submitted additional information required by the Commerce Department. Instead, ZTE has applied to the U.S Commerce Department, seeking to have the ban suspended.