U.S. extends ZTE’s sanctions relief until March 29

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By Karen Freifeld

<span class="articleLocation”>Chinese telecom equipment maker ZTE Corp has been granted a slightly longer
reprieve from export restrictions imposed by the U.S. government
as it seeks to resolve a probe of alleged violations of U.S.
sanctions on Iran.

The U.S. Commerce Department extended ZTE’s temporary export
license until March 29, the agency said in an online posting on
Thursday. The license was set to expire on Monday.

The extension allows U.S. firms to continue to supply the
Chinese company with software, technology and components despite
the restrictions announced in March 2016.

But the latest window is smaller than earlier 90-day
reprieves granted by the Commerce Department, which keeps the
pressure on and may be interpreted in two ways, according to
Washington attorney Douglas Jacobson.

“It indicates the final settlement is imminent or is just a
stopgap to give the new administration time to decide how they
want to proceed,” said Jacobson, who specializes in
international trade law and represents a number of U.S.
companies that supply ZTE.

ZTE said on Feb. 14 it was negotiating with the Commerce
Department, the U.S. Treasury Department and the U.S. Department
of Justice to conclude an investigation into its re-exporting
American-made items to Iran and other sanctioned countries in
violation of U.S. law.

It said the anticipated penalties would likely have a
material impact on the company’s financial results. ZTE has
annual sales of more than $15 billion.

A spokesman for ZTE did not immediately respond to a request
for comment on Thursday. Representatives of the Treasury and
Commerce departments also did not immediately respond. A Justice
Department spokesman declined to comment.

One of the world’s biggest telecoms gear makers with a 10
percent market share in the United States, ZTE relies on U.S.
companies including Qualcomm Inc, Microsoft Corp and Intel Corp for components.

It is also the No. 4 smartphone vendor in the United States,
and sells handsets to U.S. mobile carriers AT&T Inc,
T-Mobile US Inc and Sprint Corp.

The uncertainty hanging over the company has weighed on its
business.

Last month, company sources told Reuters that the equipment
maker was cutting about 3,000 jobs, or 5 percent of its 60,000
global workforce.

The U.S. investigation followed reports by Reuters in 2012
that the company had signed contracts to ship millions of
dollars’ worth of hardware and software from some of America’s
best-known technology companies to Iran’s largest telecoms
carrier. (Editing by Chizu Nomiyama and Matthew Lewis)



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