US Commerce Department May Slap Export Restrictions on ZTE

US Commerce Department May Slap Export Restrictions on ZTE

The United States Commerce Department may begin to apply some export restrictions on China-based ZTE, which is engaged in telecom equipment manufacturing. The move will come on the heels of alleged violations of export controls on Iran, Reuters reported. The agency report said that it would make it tough for it buy any American products. The notice is expected to be issued in the coming week.

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Restrictions On Tuesday

The reports suggested that the restrictions might come into effect on Tuesday and would become applicable to any firm wanting to ship American-made products to China-based ZTE Corp. The Department spokesperson said that those firms were not the target of the export curbs and that it was a significant factor that the action would put an additional burden on trade with the Chinese firm. The spokesperson refused to confirm or deny whether the establishment was considering any further action against the company.

In a statement, the company reacted to the media reports and said that it was more concerned about the Commerce Department’s investigation as it has been working with government departments since 2012. The company also clarified that it was maintaining constant communication with the respective departments. ZTE said it was committed to address and resolve any concerns raised.

May Prefer An Appeal

ZTE is alleged to have exported to Iran after signing contracts worth millions of dollars in 2012. The company is also able to appeal against any court order in this respect. Meanwhile, American firms including Dell, Oracle Corporation (NYSE:ORCL), International Business Machines Corp. (NYSE:IBM), and Microsoft Corporation (NASDAQ:MSFT) indicated that they were not aware of the contracts from Iran.

Still, it was not clear whether any other companies were doing business with the Chinese firm. America has in the past placed a ban on the sale of technology products to Iran. The investigators were forced to investigate whether ZTE had purchased American products with the help of front companies to be supplied to Iran, which violated the sanctions imposed by the United States at the time.