ZTE issues full statement after Commerce Department denial order

Chinese tech company ZTE is prepared to face off against the US government in court if it needs to.

That sentiment comes from a press release issued today in respond to the Department of Commerce’s Denial Order against the telecoms firm after it accused the company of not following through with the terms of last year’s settlement for trade sanction violations in 2012 — doing business with companies in Iran and North Korea. The company is set to pay a $1.19 billion fine.

The department claims that ZTE made false statements as it was negotiating the settlement and that the company failed to discipline senior employees for their roles in the scheme.

In response to those claims, the company stated:

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. It is unacceptable that [the Bureau of Industry and Security under the Department of Commerce] 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 and disregarding the fact that (1) ZTE self-identified the issues in the correspondence and self-reported by ZTE immediately; (2) the Company has taken measures against the employees who might have been responsible for this incident; (3) corrective measures has been taken immediately; and (4) a prestigious U.S. law firm has been engaged to conduct independent investigation.

The world’s seventh-largest Android phone producer is now on the Entities List, which bars it from obtaining products from companies based in the United States like Qualcomm for semiconductors, Corning for display glass and Google for essential services through Android. ZTE also relies on American parts for the bulk of its business, building telecommunications equipment for internet service providers.

“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 concludes the statement by saying that it will work to negotiate with the government. It may also decide to take non-specific “judicial measures” to defend its position — if a lawsuit is filed, the company may attempt an injunction at the Denial Order to keep parts supplies from the US flowing.

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Jules Wang
Jules Wang is News Editor for Pocketnow and one of the hosts of the Pocketnow Weekly Podcast. He came onto the team in 2014 as an intern editing and producing videos and the podcast while he was studying journalism at Emerson College. He graduated the year after and entered into his current position at Pocketnow, full-time.