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US Department of Commerce to accept additional evidence from ZTE

26 April 2018

Now, the Wall Street Journal reports the government is taking more direct action against the Chinese technology giant.

The DOJ's actions follow a larger pattern of the USA increasingly cracking down on Chinese firms. The New York Times last April reported the U.S. Treasury's Office of Foreign Assets Control subpoena, issued in December 2016, following a Commerce Department subpoena that summer. The company failed to comply with the punishment set forth by the U.S. Commerce Department and now is banned from receiving U.S. exports until March 2025.

Details on specific violations the DOJ's Huawei investigation is probing are not known yet. That's the same thing that got ZTE slapped with a almost $1 billion fine and (recently) a USA technology export ban.

A spokesman for the Justice Department declined to comment.

Signaling the rising unease in the United States towards Huawei and fellow Chinese telecoms group ZTE Corp, last month the Federal Communications Commission proposed a new rule that would restrict small telecoms carriers from purchasing "equipment or services from companies that pose a national security threat". The measure has yet to be finalized.

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Huawei and ZTE have denied these allegations. "In 30 years, not a single operator has experienced a security issue with our equipment". Somewhat fueled by the fact that the founder of the company once worked for the Chinese government. After all, Huawei has been in the USA government's cross hair perhaps longer than ZTE.

ZTE "is making active communications with relevant parties and seeking a solution to the U.S. export denial order", it added in the statement.

Following a somewhat gloomy outlook from Apple's main supplier of semiconductors, Taiwan Semiconductor Manufacturing Co., markets are also losing confidence in Chinese hardware makers. Then, consumer electronics retailer Best Buy Co. stopped selling Huawei phones, laptops and smartwatches.

Bloomberg's Greg Farrell contributed.

US Department of Commerce to accept additional evidence from ZTE