The U.S. Commerce Department will allow some companies to do business with ZTE. For now, it is a temporary reprieve. In April, the Commerce Dept. issued a so-called Denial Order banning U.S. companies from selling components to ZTE. The U.S. issued the order after ZTE breached a 2017 agreement it reached with the U.S. Justice Department for violating sanctions against Iran and the DPRK. U.S. lawmakers also allege that ZTE and Huawei – both Chinese telecoms – pose a national security threat.
The temporary waiver allows ZTE to resume some of its prohibited business activities. The waiver lasts from July 2 to August 1, 2018. It does not lift the April 15, 2018 Denial Order, but under this new authorization ZTE can “maintain and support” equipment sold or leased under agreements executed before April 15. The waiver also permits ZTE to provide customer support for ZTE phones sold on or before that date.
Last week, ZTE dismissed its board and appointed a new chairman. According to Bloomberg News, a Commerce Department official said at the time that ZTE had met nearly all conditions for lifting the ban on purchasing U.S. components. The Shenzhen-based company had paid an additional $1 billion fine levied by the U.S. this year, and was about to put another $400 million in escrow.
Monday’s order also permits ZTE to receive information on “security vulnerabilities” to help the company maintain the “integrity and reliability” of its communication networks and equipment.
The Commerce Department gave no rationale for granting the waiver. After the April 15th order, ZTE suspended operations, and said the U.S. action could put it out of business. The company employs some 80,000 people. It is headquartered in Shenzhen, China.
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