ZTE strikes back: Chinese manufacturer may take "judicial measures" against Department of Commerce

It’s been a rough month for ZTE. After making waves with the introduction of a new dual-screen phone, the Axon M, and gearing up to release a new gaming-focused smartphone, the Chinese brand got slammed by the U.S. Department of Commerce (DOC) with a 7-year ban from buying components from U.S. companies. This ban was enacted as a penalty for ZTE not taking action in a 2016 judgement concerning exports to embargoed countries like Iran and North Korea and includes companies like Qualcomm and Dolby. ZTE won’t take the ruling sitting down, however, and has responded to the DOC’s ban, threatening “judicial measures” if they need to.

In their response, ZTE claims that (in spite of the DOC’s opinion and ruling) the company has made huge strides toward reconciling their exports to bring them into code with the U.S.’s current embargoes. ZTE said that they created several compliance teams (some led by the CEO) and hired external consultants to formulate training, operations, and procedures to ensure that their products won’t be sold to embargoed nations. The Chinese company claims that they spent over USD $50 million in export control and compliance last year.

However, as the DOC enacted the ban because ZTE did not reduce bonuses and failed to reprimand 35 key employees by the deadline they were given, the company may not have much of a leg upon which their argument can stand. ZTE is crying foul and saying that the DOC is being unfair in its action and activated the ban without gathering facts. The company also states that the ban will not only “severely impact [their] survival and development” but that the ban will also “cause damages to all partners of ZTE including (sic) a large number of U.S. companies.”

At the end of their statement, ZTE even goes so far as to threaten legal action against the DOC should an agreeable resolution not be reached. The company says that they will continue to fight for their employees and shareholders, who they are calling to unite as one “with full confidence to work together taking best efforts to facilitate a final resolution (sic).” The DOC as yet to comment on this response as of this writing.

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