China's ZTE removed chief compliance officer before U.S. sanction, says source


Google declined comment and ZTE did not respond to requests to comment.

ZTE announced the delay as components makers, wireless carriers, retailers and the maker of the widely used Android operating system sought to clarify how they will be affected by the order, announced on Monday by the U.S. Commerce Department. The Commerce Department's action follows a March 23, 2017 settlement agreement related to ZTE activities in violation of USA law regarding Iran and North Korea.

The results were previously scheduled for Thursday. According to reports, ZTE has plead guilty to circumventing the embargoes, and as a result they will be banned from purchasing components from USA manufacturers for 7 years.

In terms of business, trading in ZTE shares was suspended in Hong Kong soon after the announcement of the ban yesterday.

ZTE said its board postponed a meeting to approve the results while it reviews the order.

ZTE has not responded to requests to describe how it intends to respond to the ban, which a senior U.S. Commerce official told Reuters is unlikely to be lifted.

It is not clear what percentage of ZTE smartphones are based on Qualcomm Snapdragon processors but if it is half and the chips can command a price of $25 it would represent a potential loss of $500 million in sales.

The world's telecom giants due to do battle over licences for 5G wireless technology [/ame-cRepCRights] Despite the apparent security threat from Huawei and ZTE's technology, neither the U.S. of Britain has recommended that the two firms' hardware be immediately removed.

The talks underscore China's concern about its reliance on imported chips from global names such as Qualcomm Inc and Intel Corp, aggravated by a worsening dispute with the United States centred on cutting-edge tech.

The proposed new rules from the Federal Communications Commission (FCC), meanwhile, which are expected to be finalized this year, appear to be another prong in a USA effort to prevent ZTE and Huawei from gaining significant market share in the United States. More recently there is debate over whether this includes the free licence for Android, or perhaps more likely whether they could continue to use the open-source Android components but exclude all of Google's services including the Play Store. Most ZTE phones sell for below $300, a low-end segment of the US market, ZTE's mobile chief executive, Lixin Cheng, told Reuters in January.

That goal has been given fresh urgency after a USA ban on sales of products ù including chips - to Chinese phone maker ZTE Corp roiled the firm, which uses mainly U.S. chips in its smartphones. The company has spent billions of dollars licensing technology from US partners, he said.