US Commerce Dept. Bans ZTE from Exporting Tech
ZTE is not allowed to export sensitive technology from the U.S. due to new action from the U.S. Department of Commerce. Moreover, U.S. tech suppliers (such as Qualcomm) cannot sell components to ZTE for a period of seven years. ZTE violated the terms of an agreement it made with the government over previous transgressions and the Commerce Department is coming down on the company hard. Officials at the agency say ZTE made false statements to the Bureau of Industry and Security in 2016 and 2017 concerning executive pay and disciplinary action related to the company's earlier transgressions. In 2016, ZTE was temporarily blocked for exporting forbidden technology to Iran. In 2017, ZTE agreed to pay a huge fine to settle the matter, as well as fire four executives and discipline 35 other managers. In the wake of those events the company did not take the proper disciplinary action, according to the Commerce Department. "ZTE misled the Department of Commerce. Instead of reprimanding ZTE staff and senior management, ZTE rewarded them. This egregious behavior cannot be ignored," said Commerce Secretary Wilbur Ross. While ZTE did in fact fire four managers, the company recently admitted it did not take any action at all against the other 35 managers. "We can't trust what they are telling us is truthful," said an official to Reuters. "And in international commerce, truth is pretty important." A lawyer representing companies that sell products to ZTE warned of dire consequences. "This will be devastating to the company, given their reliance on U.S. products and software," said Douglas Jacobson. "It's certainly going to make it very difficult for them to produce and will have a potentially significant short and long-term negative impact on the company." ZTE did not comment on the matter directly.
May 6, 2018
ZTE has filed an application with the U.S. Commerce Department's Bureau of Industry and Security in hopes that the government will suspend its ban against the company.
Jun 29, 2018
ZTE is nearly ready to install a new board of directors, a step required by the U.S. Department of Commerce if the company wants to end the ban on U.S.
May 22, 2018
The U.S. and China are near to reaching a deal that would offer ZTE reprieve from the seven-year ban enacted against it by the Commerce Department.
May 25, 2018
The Trump administration has handed ZTE an olive branch, according to sources cited by the New York Times and Reuters. The Commerce Department has brokered a deal that will allow ZTE to resume operations as long as it agrees to pay a substantial fine, submit to American compliance officers, and wholly change is management team.
May 13, 2018
President Trump took to Twitter this morning to suggest he's looking to recall the Commerce Department's ban against ZTE. "President Xi of China, and I, are working together to give massive Chinese phone company, ZTE, a way to get back into business, fast," wrote the President.