China’s ZTE slams US ban on sales, says company’s survival at risk

ZTE said it regards compliance as the cornerstone of its strategy, adding it invested $50 million in export control compliance projects in 2017 and plans to invest more this year. (Reuters)
Updated 20 April 2018
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China’s ZTE slams US ban on sales, says company’s survival at risk

  • ZTE said it regards compliance as the cornerstone of its strategy, adding it invested $50 million in export control compliance projects in 2017 and plans to invest more this year
  • ZTE said it will not give up efforts to solve problems through communication

HONG KONG: China’s ZTE Corp. said on Friday that a US ban on the sale of parts and software to the company was unfair and threatens its survival, and vowed to safeguard its interests through all legal means.
The US this week imposed a ban on sales by American companies to ZTE for seven years, saying the Chinese company had broken a settlement agreement with repeated false statements — a move that threatens to cut off its supply chain.
“It is unacceptable that BIS insists on unfairly imposing the most severe penalty on ZTE even before the completion of investigation of facts,” ZTE said in its first response since the ban was announced, referring to the US Commerce Department’s Bureau of Industry and Security.
“The Denial Order will not only severely impact the survival and development of ZTE, but will also cause damages to all partners of ZTE including a large number of US companies,” ZTE said in a statement.
ZTE said it regards compliance as the cornerstone of its strategy, adding it invested $50 million in export control compliance projects in 2017 and plans to invest more this year.
A senior US Commerce Department official told Reuters earlier this week that it is unlikely to lift the ban.
“We’re going to have to see how this unfolds. But there is no provision currently for that to occur,” the official said, who declined to be identified due to the sensitivity of the matter.
The Commerce Department has an appeals process for companies to try to get off the list, but it is unclear whether that would be available to ZTE because the case had been previously subject to a settlement, according to people familiar with the matter.
Even so, ZTE would have little recourse in the near term because appeals would have to be approved by the Bureau of Industry and Security, the same agency that issued the ban.
Companies must submit appeals to a committee that would issue a ruling within 30 days, according to the agency’s website.
ZTE said it will not give up efforts to solve problems through communication, and it is determined to take judicial measures to protect the legal rights and interests of the company.
The ban has ratcheted up tensions between China and the United States at a time when they have already threatened each other with tens of billions of dollars in tariffs, fanning worries of a full-blown trade war that.
In China, there has been a patriotic backlash with an outpouring of support for ZTE on social media and most domestic newspapers have chosen to put the lion’s share of the blame for ZTE’s troubles on the country’s heavy reliance on foreign semiconductors.
Meanwhile, the US government is considering using an emergency law to restrict Chinese investments in sensitive US technologies, a senior Treasury official said on Thursday.
Trade in ZTE shares has been suspended since Tuesday. As of Monday’s close, they were worth some $19 billion.


First Abu Dhabi Bank to start commercial banking in Saudi Arabia this year

Updated 47 min 8 sec ago
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First Abu Dhabi Bank to start commercial banking in Saudi Arabia this year

  • FAB is the latest foreign bank attracted by openings in Saudi Arabia
  • It had already completed its first debt capital markets transaction in the kingdom through its investment banking business

DUBAI: First Abu Dhabi Bank (FAB), the largest lender in the UAE by assets, said on Monday it will launch commercial banking operations in Saudi Arabia by the end of this year.
The bank, which was granted a commercial banking license in Saudi Arabia earlier this year, has been expanding its staff in the kingdom as it seeks to benefit from the government’s drive to move the economy beyond oil revenues.
It appointed Abdullah Abubakr as head of private banking in Saudi Arabia as of this month, according to his LinkedIn page.
FAB did not respond to a request for comment on his appointment.
FAB is the latest foreign bank attracted by openings in Saudi Arabia. The bank said it had already completed its first debt capital markets transaction in the kingdom through its investment banking business. In February, it was granted a license to conduct arranging and advising activities in the securities business. The bank also on Monday reported a 16 percent rise in third quarter net profit as net interest income and fees and commissions edged higher.
FAB made a net profit of 3.02 billion dirhams ($822 million) in the three months ending Sept. 30, up from 2.61 billion dirhams in the prior-year period, it said in a statement. SICO Bahrain had forecast FAB’s quarterly profit at 2.87 billion dirhams.
FAB’s performance was helped by lower net impairment charges during the quarter, with impairments falling 23 percent to 435 million dirhams. Loans and advances rose to 354 billion dirhams as of Sept. 30, up 8 percent from the same period of last year. Deposits totaled 455 billion dirhams, up 20 percent from a year earlier.