Sunday, 13 May 2018 05:47

ZTE ban: company claims it did not set out to deceive

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Chinese telecommunications company ZTE Corporation, banned from buying components from American firms for seven years, is trying to convince US authorities that it failed to meet the terms of a settlement over breaking export sanctions due to problems within its own processes, and not due to a plan to deceive.

The Wall Street Journal  cited a person who was familiar with the company's filings as saying it had told US authorities that the penalty levied on it was disproportionate to the offence, adding that the ban would hit US businesses to the tune of billions.

According to a Reuters  report, ZTE paid more than US$2.3 billion to 211 American exporters in 2017.

Citing a senior ZTE official, the news agency reported that ZTE had paid more than US$100 million each to Qualcomm, Broadcom, Texas Instruments, Xilinx, Acacia Communications and Sandisk.

The US Department of Commerce imposed the ban on ZTE in April, saying at the time that it was due to alleged false statements made by the company during talks in 2016 over a charge of shipping telco equipment to Iran and North Korea.

As a penalty, US firms cannot sell parts to ZTE for seven years.

ZTE was fined US$1.19 billion in March 2017 and also agreed to a seven-year suspended export ban which would take effect if it was found to be in violation of the Export Administration Regulations.

Subsequently, the Department of Commerce claims to have found that statements made by ZTE to the Bureau of Industry and Security were false.

Australia's biggest telco Telstra has pulled about 22 ZTE devices from sale after the company said it was halting its main business activities in the US.

Chinese officials raised the ZTE issue with US officials during talks last week to resolve a trade row and are expected to do so again when another round of talks are held next week.

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Sam Varghese

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Sam Varghese has been writing for iTWire since 2006, a year after the site came into existence. For nearly a decade thereafter, he wrote mostly about free and open source software, based on his own use of this genre of software. Since May 2016, he has been writing across many areas of technology. He has been a journalist for nearly 40 years in India (Indian Express and Deccan Herald), the UAE (Khaleej Times) and Australia (Daily Commercial News (now defunct) and The Age). His personal blog is titled Irregular Expression.

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