US extends ZTE reprieve for alleged Iran sanctions violations

The renewed Commerce Department license allows ZTE to continue exporting equipment containing US technology.

By: Reuters | Washington | Published: June 28, 2016 10:24:55 am

The US government has extended through August 30 a reprieve to ZTE Corporation on tough export restrictions imposed on the Chinese smartphone maker in March for allegedly breaking sanctions against Iran, the Commerce Department said on Monday.

The renewed Commerce Department license allows ZTE to continue exporting equipment containing US technology. The agency said in March that its first reprieve could be extended if the company cooperated with the government.

Experts had said US export restrictions were some of the toughest ever applied and would have caused disruption across ZTE’s sprawling global supply chain.

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The restrictions would have banned US companies from exporting to ZTE any technology, software or equipment such as chips and processors made in the United States. The decision would also have prevented software makers from selling typical office applications like Microsoft Windows – or even providing updates.

But soon after imposing the restrictions in March, the agency offered the company a three-month relief from the restrictions, which was set to expire June 30. The Commerce Department announced the extension in a notice posted Monday.

In an emailed statement, ZTE Chairman Zhao Xianming said the extension shows that the company is improving its compliance and cooperating with the government’s investigation. The reprieve will allow ZTE to maintain its “relationships with hundreds of American companies and our continued investment in the US,” he said.

The Commerce Department investigated ZTE for alleged export-control violations following Reuters reports in 2012 that the company had signed contracts to ship millions of dollars worth of American-made hardware and software to Iran’s largest telecoms carrier.

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