ZTE filed for a reprieve of the technology purchase ban imposed on it by the United States Commerce Department, the Chinese company said in a Sunday filing with the Hong Kong Stock Exchange. The sanction was issued last month in response to ZTE’s failure to comply with the terms of its 2017 settlement meant to put an end to Washington’s investigation into its violations of U.S. trade sanctions on Iran. ZTE pleaded guilty to a conspiracy to violate the sanctions, having accepted an $892 million fine and agreed to fire four officials, in addition to disciplining 35 others, either by reprimanding them or withholding their bonuses. The company failed to comply with the latter part of the agreement for reasons that are yet to be disclosed.
ZTE is already familiar with the process of seeking reprieves of Washington’s sanctions, having already seen success with postponing U.S. penalties due to its Iran dealings on a handful of occasions throughout 2016 and 2017. It’s presently unclear what are the chances of its latest filing being successful and lifting its ban on the purchase of any American technologies until its appeal is heard and reviewed. The Commerce Department’s sanctions apply to the following seven years and threaten the existence of ZTE’s smartphone business seeing how they’re preventing it from licensing Google’s operating system, purchasing Qualcomm’s Snapdragon chips, and acquiring a broad range of other technologies that are crucial for the development of contemporary handsets, the firm previously argued.
ZTE labeled the move unfair and “unacceptable” as it came in response to settlement violations that were self-reported to Washington, implying that the fact the 35 employees in question haven’t been disciplined wasn’t an intentional act of defiance. The Shenzhen, China-based company recently said it’s pondering a lawsuit but has yet to start any litigation against the U.S. It also correlated the development to recent tensions between Washington and Beijing about trade, though American regulators remain adamant the two aren’t directly related. Members of the ruling Republican party are presently pushing for two bills meant to prevent federal purchases of equipment from ZTE and Huawei due to national security concerns. ZTE is a publicly traded entity, though its majority stake is owned by the People’s Republic of China.