U.S. extends ZTE reprieve for alleged Iran sanctions violations (updated)

Ztest Electronics

27/06/2016 23:35

(Adds context on impact of restrictions, company comment) 
    By Joel Schectman 
    WASHINGTON, June 27 (Reuters) - The U.S. government has 
extended through Aug. 30 a reprieve to ZTE Corp  000063.SZ  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 U.S. technology. The 
agency said in March that its first reprieve could be extended 
if the company cooperated with the government. 
    Experts had said U.S. export restrictions were some of the 
toughest ever applied and would have caused disruption across 
ZTE's sprawling global supply chain. 
    The restrictions would have banned U.S. 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 U.S," 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. 
 
 (Reporting by Joel Schectman; Editing by Alan Crosby and Andrew 
Hay) 
 ((Joel.Schectman@thomsonreuters.com;)) 
 
Keywords: ZTE USA/SANCTIONS