U.S. Ready to Cut Slack to ZTE for Breaches of Sanctions
This relief would only be temporary and would be kept just if ZTE abides by the commitments to the U.S. government, according to a Commerce Department senior official who asked to remain anonymous.
The restrictions by the Commerce Department imposed in early March made it tough for ZTE to acquire components in the U.S. by requiring suppliers to the China-based company to apply for a license to export prior to shipping any parts or equipment that was American made to ZTE.
The department said that the applications for the export license would be denied.
ZTE, based in Shenzhen, has been in constructive and active discussions with the department for the last week, according to one senior Commerce official.
The official added that as part of the efforts to bring this matter to an equitable resolution and based on binding commitments, ZTE has made to the government of the U.S., the Department of Commerce is expecting to sometime this week provide some temporary relief from licensing requirements.
Details of such commitments will likely be published during the week as well.
ZTE could not be reached for comment. The company is amongst the biggest that the Department of Commerce hit with a close to total export ban, shows public records.
ZTE is currently the No. 4 largest vendor of smartphones in the U.S. with a market share of 7%, behind Apple, Samsung and LG Electronics, showed data supplied by IDC.
It sells mobile handset devices to AT&T, Sprint and T-Mobile in the U.S.
The restrictions placed on exports drew protests from the government of China and hit business hard at ZTE.
Shares of the company have not been trading in Hong Kong for the last two weeks. The company announced last week that it was going to delay its publication of its results for the year, while it makes an assessment of the impact of the action taken by Washington.
The board meeting for ZTE was also postponed.