Weird news

ZTE is leaving a broken American Standard urinal unfixed to avoid breaching US export ban

ZTE note says urinal will be restored to operation when export ban is lifted

PUBLISHED : Friday, 22 June, 2018, 10:34am
UPDATED : Tuesday, 26 June, 2018, 4:33am

ZTE Corp is leaving a broken US-made urinal unfixed because it is afraid that repairing it may cause the company to run afoul of a blanket ban on buying American-sourced products.

The offending urinal at one of its offices in Shenzhen, China, is made by American Standard, a New Jersey-based sanitary fittings manufacturer, according to a notice posted by ZTE’s administration department.

The notice said that the company is unable to buy the spare parts to repair the toilet due to the export ban.

The note, a photo of which was posted online and verified by a ZTE employee, goes on to promise that the urinal would be fixed and brought back into operation as soon as the US-government ban is lifted.

“We are not allowed to purchase US components or accessories,” said a person familiar with the matter, who declined to be named as the information is private. ZTE did not respond to a request for comment.

The Shenzhen-based telecoms equipment supplier has agreed to pay an additional US$1 billion fine, put a further US$400 million in escrow and pay for a US-appointed compliance team as part of a bilateral settlement agreed by China and the Trump administration to lift a seven-year ban for selling American products to Iran.

ZTE agreed to pay the additional fines as part of a White House-brokered deal, after the company admitted that it paid full bonuses to employees who engaged in the illegal sales of equipment to Iran, failed to issue letters of reprimand to those employees, and then lied about it to US authorities.

ZTE team moves to implement US settlement amid high secrecy and uncertainty

ZTE first got in trouble in 2016 for selling technology products to Iran and North Korea in violation of US sanctions.

The company agreed to pay more than US$1 billion and penalise the workers involved. But the Commerce Department said in April that ZTE failed to make good on its remedies, and the agency imposed the seven-year ban, which led within weeks to ZTE shutting down its operations.

In May, President Trump said he planned to walk back the ban, and the Commerce Department struck a deal under which ZTE agreed to pay an additional fine, install US compliance officers and replace its board.

ZTE shares bounce back ahead of Trump meeting with Republican lawmakers

In a race to resume buying American components, ZTE has paid the US$1 billion fine and is in the final stages setting up the escrow account in the event of future violations.

However, even though the Chinese company is moving ahead with the deal, its fate is uncertain after the US Senate on Monday passed a defence bill that included an amendment that would reinstate the ban. On Wednesday, Trump met with Republican lawmakers in an effort to keep his ZTE deal alive, although no compromise emerged.

US senators’ ZTE opposition may have unintended silver lining for Trump

The version of the National Defense Authorization Act passed by the US Senate needs to be reconciled with the version already passed by the US House of Representatives though, and the reconciled version from the two chambers of the US Congress also needs to be signed off by President Trump before it becomes law.