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ZTE Corp. will appeal tough U.S. export restrictions imposed last week, according to a source familiar with the matter, after the Shenzhen-based telecom equipment maker’s costly lobbying effort failed to allay concerns about its business.
The U.S. Commerce Department imposed restrictions on U.S. suppliers providing crucial components to ZTE for alleged Iran sanctions violations, a move likely to disrupt its global supply chain.
“The U.S. Commerce Department and ZTE are in ongoing discussions,” a senior U.S. Commerce Department official said. “These discussions have been constructive and we will continue to seek a resolution.”
How long the appeals process might take remains unclear. It usually takes a year or more for export curbs to be removed for a company, but the U.S. Government can act more quickly.
The Wall Street Journal reported yesterday that the U.S. Commerce Department on Tuesday confirmed it is in talks with ZTE and a ZTE spokesman confirmed that the firm is in discussions with the U.S. Commerce Department, but declined to disclose any details.
In statements following the imposition of the restrictions, ZTE said it was “actively facilitating communications with the U.S. Governmental department to search for a solution.”
The U.S. decision hinders ZTE’s ability to buy U.S. components and software, which has prompted protests from the Chinese Government.
“The Chinese side attaches great attention and strong dissatisfaction over this,” said Chinese Commerce Minister Gao Hucheng in a television broadcast Monday.
Gao said China hopes the U.S. Government will remove ZTE from the list of restricted entities “in order to avoid harming the stable, healthy development of China-U.S. economic and trade relations.”
ZTE is a major global supplier of telecom networking equipment such as mobile phone base stations and antennas, and it is also the only Chinese smartphone brand with substantial handset sales in the United States. Its global sales last year were about US$15.5 billion.
(SD-Agencies)
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