U.S. government said ZTE violated export controls on Iran
The U.S. Commerce Department said it plans to implement export restrictions on Chinese telecom equipment manufacturer ZTE for alleged violations of U.S. export controls on Iran.
According to Reuters, the export restrictions will take effect March 8.
The report notes an investigation by the Commerce Department revealed ZTE allegedly violated the ban by importing U.S.-made products through shell companies and shipping them to Iran. This alleged action violates trade provisions prohibiting the sale of U.S.-made technology to Iran.
The restrictions to be implemented by the U.S. government are said it make it difficult for ZTE to acquire U.S. products as local authorities will require ZTE suppliers to apply for an export license in order to send U.S.-made equipment. The move is expected to impact ZTE’s global supply chain and could generate shortage of certain parts for the company. ZTE’s main U.S.-based supplies include Qualcomm, Intel, IBM, Microsoft and Texas Instruments. According to the report, ZTE has already urged its suppliers in the U.S. to apply for the export licenses to fulfill new requirements imposed by the government. However, the U.S. Commerce Department said these license applications will generally be denied.
The Chinese company, which can appeal the decision, said it will continue to cooperate with U.S. government agencies regarding the issue.
“ZTE is fully committed to compliance with the laws and regulations in the jurisdictions in which it operates,” the company said in a statement. “ZTE has been cooperating, will continue to cooperate and communicate with all U.S. agencies as required. The company is working expeditiously towards resolution of this issue.”
The Chinese government raised its voice to oppose the decision.
“China expresses its strong dissatisfaction and resolute opposition [to the measure],” the Chinese Ministry of Commerce said in a statement. “The U.S. move will severely affect normal operations of Chinese companies. China will continue negotiating with the U.S. side on this issue.”
Meanwhile, China’s Foreign Ministry spokesman Hong Lei said China is opposed to the U.S. citing domestic laws to place sanctions on Chinese enterprises.
The U.S. government in 2010 urged U.S. telecom operators to avoid using essential network equipment from Chinese vendors ZTE and Huawei citing possible security concerns.
