Published: Fri, April 27, 2018
Hi-Tech | By Wayne Curry

ZTE calls United States export ban "unacceptable"

ZTE calls United States export ban

China has called on Washington to avoid damaging business confidence following a report USA authorities are investigating whether Chinese tech giant Huawei violated sanctions on Iran.

Once the trade row spreads to other China smartphone vendors such as Huawei, Xiaomi and Oppo, US partners in the smartphone supply chains will face unimaginable business losses, given their combined total shipments of over 350 million units estimated for 2018, observers indicated. Justice has been focused on sanctions violations, but other parts of government, including the White House and Congress, are taking action against Chinese companies under the pretext of national security.

Shares of several U.S. suppliers of ZTE slumped immediately after the U.S. Department of Commerce banned sales of components to ZTE for seven years for its alleged violations of the Export Administration Regulations.

"ZTE made false statements to the U.S. Government when they were originally caught and put on the Entity List, made false statements during the reprieve it was given, and made false statements again during its probation", said Secretary of Commerce Wilbur L. Ross earlier this month.

Huawei "complies with all applicable laws and regulations where it operates, including the applicable export control and sanction laws and regulations of UN, US and EU", according to a statement by the company.

The prohibition had been imposed in March a year ago, when ZTE agreed to pay $892.3 million to settle the United States investigation into the sanctions case.

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Acacia, the Massachusetts-based optical interconnect components maker, is among the major affected American companies.

Reuters reported that since at least 2016, USA authorities have been probing Huawei's alleged shipping of US -origin products to Iran in violation of US sanctions law.

In Beijing, foreign ministry spokeswoman Hua Chunying said China opposed countries imposing their own laws on others when asked whether Huawei violated U.S. sanctions related to Iran.

At the Huawei Analysts Summit in Shenzhen last week, Huawei rotating chariman Eric Xu appeared to acknowledge that the company has been largely locked out of the United States market.

On April 20, ZTE said that the U.S ban was unfair and threatens its survival. The company is supposedly being investigated by the Department of Justice for violating sanctions against Iran; something that could lead to severe penalties and a possible ban. In January 2013, Reuters reported that a Hong Kong-based firm that attempted to sell embargoed Hewlett-Packard computer equipment to Iran's largest mobile-phone operator has much closer ties to China's Huawei Technologies than was previously known.

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