The US Commerce Department will put export restrictions on Chinese equipment vendor ZTE for allegedly violating US export controls on Iran as part of an investigation dating back to 2012, Reuters reported.
The restrictions, which take effect on Tuesday, will require ZTE suppliers worldwide to apply for an export licence before shipping any US-made equipment or parts to ZTE. The applications generally would be denied, the Commerce Department said.
“This is a significant new burden on trade with ZTE,” a senior official at the Commerce Department told Reuters. The company can appeal the decision.
Shenzhen-based ZTE said in a statement that it has been working with relevant US government departments on the investigations, maintaining constant communication with relevant departments and is committed to fully addressing and resolving any concerns.
“ZTE will continue with normal operations while conducting comprehensive assessments and will be actively communicating with stakeholders. As a responsible business, ZTE strives to ensure all operational activities adhere to international trade practices and the laws and regulations of host countries.”
The investigation by the Commerce Department followed reports that ZTE signed contracts to ship millions of dollars worth of hardware and software from US tech firms to Iran’s largest telecoms carrier, Telecommunication Co of Iran (TCI), Reuters reported. The companies — including Dell, IBM, Microsoft and Oracle — have all said they were not aware of the Iranian contracts.
Investigators uncovered internal ZTE documents, marked “top secret”, outlining an alleged sanctions-busting scheme, but a Commerce Department official declined to say if the company had implemented that scheme, according to Reuters.