The Commerce Department said the partial authorization will be valid until August 1
The U.S. government has issued a limited service authorization which would allow Chinese vendor ZTE to resume certain activities. ZTE halted business operations in May due to a seven-year ban on the purchase of components from U.S. companies, which was imposed by the Commerce Department.
The Commerce Department’s Bureau of Industry and Security (BIS) said that this partial authorization is valid from July 2 until August 1.
The authorization will allow the Chinese vendor to support existing networks or equipment under contracts signed on or before April 15, when the Trump administration blocked U.S. companies from selling components to ZTE.
BIS also authorized parties to “make and receive payments to and from ZTE from transactions and activities lawful pursuant of the authorization.”
The limited authorization also enables ZTE to service and support cell phones available to the public before April 15.
The order also authorizes the disclosure to ZTE of information regarding security vulnerabilities in items owned, possessed or controlled by ZTE to protect communication networks and equipment.
That seven-year ban had been imposed by the Department of Commerce’s BIS after the vendor allegedly did not live up to the terms of an agreement that had been worked out after it illegally shipped telecom equipment to Iran and North Korea. In early May, ZTE said it had ceased its major operating activities due to the export ban.
Last month, the U.S government reached an agreement with ZTE which would allow the firm to resume business. Under the current terms of the agreement, the Chinese company must replace its leadership and pay $1 billion to the U.S. government as part of a settlement agreement, as well as an additional $400 million in escrow. ZTE has been naming replacements for its senior leadership to meet those requirements, putting Xu Ziyang, a former head of its German operations, into the role of company CTO.
Congress has been attempting to weigh in on the ban and reinstate it. The U.S. Senate had previously voted to include an amendment to the defense bill which would reinstate the ban on ZTE buying components from U.S. tech companies such as Qualcomm, Dolby, Intel, Google and Acacia Communications. President Donald Trump recently had a meeting with a group of Republican senators with the aim of protecting the deal between the U.S government and ZTE. At the meeting, Trump urged the senators not to undermine his efforts regarding the ZTE issue, warning them that the deal with the Chinese vendor was part of a broader negotiation with China.
ZTE is expected to be in compliance with U.S demands by August 1, Bloomberg reported, citing a person familiar with the matter.
ZTE has lost a key contract with Italian telecommunications firm Wind Tre due to the ban imposed by the U.S authorities. The Chinese vendor had initially won the contract to modernize the Italian telco’s radio network access (RAN). Wind Tre has recently announced that part of that contract had been now awarded to Swedish vendor Ericsson.
