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ZTE Blasts 'Unfair' US Ban, Vows to Fight

Chinese phone maker ZTE calls a U.S. export ban to the company "unacceptable" and and claims it may fight the ruling in court.

The ZTE Axon M. Credit: Tom's Guide

(Image credit: The ZTE Axon M. Credit: Tom's Guide)

The U.S. Department of Commerce banned exports from U.S. companies to ZTE as punishment for not revoking the bonuses of employees responsible for shipping telecommunications equipment to Iran and North Korea. ZTE, however, claims in a statement that it is boosting export compliance and needs more time to investigate.

"It is unacceptable that [the Department of Commerce's Bureau of Industry and Security] insists on unfairly imposing the most severe penalty on ZTE even before the completion of investigation of facts, ignoring the continuous diligent work of ZTE and the progress we have made on export compliance," the statement says.

ZTE also contends that "corrective measures" were taken (though it doesn't specify what those were in its statement). The company says it's hired a U.S. law firm to conduct an investigation.

ZTE says that the ban will impact the "survival and development" of ZTE, which is easy to believe since the ban would prevent ZTE from using materials like mobile processors from Qualcomm and other parts from the likes of Intel and Dolby. Potentially, the ban could even prevent ZTE from using Google's Android OS. Not only would that make it difficult for ZTE to make smartphones that work in the U.S., the company contends that its US suppliers would also suffer damage.

Reuters reports that ZTE can appeal to the Bureau of Industry and Security, the same agency that issued the ban. A ruling would be made within 30 days. A source told the publication the ban is unlikely to be overturned.

The feud between the Department of Commerce and ZTE comes as Chinese mobile companies like Huawei and ZTE are coming under scrutiny from the U.S. government over safety concerns and amid a potential trade war between the U.S. and China.