NEW YORK (Reuters) - The U.S. Commerce Department has granted ZTE Corp’s (000063.SZ) (0763.HK) request to submit more evidence after the agency banned American companies from selling to the Chinese technology firm, a senior Commerce official said on Saturday.
The U.S. Commerce Department’s Bureau of Industry and Security, or BIS, this week banned American companies from selling to ZTE for seven years, saying the Chinese company had broken a settlement agreement with repeated false statements. The action was sparked by ZTE’s violation of an agreement that was reached after it was caught illegally shipping U.S. goods to Iran.
According to Commerce regulations, there is no appeals process, but the agency has “exercised discretion” to let ZTE present additional evidence through an “informal procedure,” the senior official said.
The Wall Street Journal first reported the decision by Commerce to allow more evidence.
ZTE, in a statement on Friday, called the initial decision “unacceptable” and said it could cause damage to both the company and its partners.
It is unclear whether the decision to accept more evidence would provide a chance for resolution between U.S. regulators and the company.
This week’s U.S. action, first reported by Reuters, could be devastating to ZTE since American companies are estimated to provide 25 to 30 percent of the components used in ZTE’s equipment, which includes networking gear and smartphones.
The ban is the result of ZTE’s failure to comply with an agreement with the U.S. government after it pleaded guilty last year in federal court in Texas to conspiring to violate U.S. sanctions by