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Report: ZTE blames internal process issues for failure to comply with agreement

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Report: ZTE blames internal process issues for failure to comply with agreement

ZTE Corp. said process and human-resource problems caused its violation of a settlement agreement resolving sanctions-related charges, The Wall Street Journal reported May 12.

The U.S. Commerce Department recently imposed export restrictions on ZTE for seven years, accusing the Chinese telecom gear maker of repeatedly making false statements and violating international sanctions. ZTE ceased its major operating activities as a result of the export restrictions.

In a tweet May 13, President Trump said he is working with China's President Xi Jinping to "give massive Chinese phone company, ZTE, a way to get back into business, fast. Too many jobs in China lost. Commerce Department has been instructed to get it done!"

ZTE said it was actively communicating with the U.S. government to facilitate the reversal of or changes to the order and "forge a positive outcome in the development of the matters." The company said it had filed an application for a suspension of the ban.

ZTE said it never deliberately sought to lie to the government, The Wall Street Journal report said, citing a person familiar with ZTE’s filings.

The restrictions bar ZTE from participating in any transaction subject to the U.S. government's Export Administration Regulations and prohibit businesses and individuals in the U.S. from selling components to the company.

The ban stems from a 2017 settlement agreement with ZTE, in which ZTE agreed to a combined civil and criminal penalty and forfeiture of $1.19 billion after illegally shipping telecommunications equipment to Iran and North Korea, making false statements and obstructing justice.