Last March, the US Department of Commerce placed trade restrictions on Chinese telecom equipment vendor, ZTE, after a four year-long investigation by the FBI (into alleged violations of a trade embargo placed on Iran) seemed to show that the Shenzhen-based company had supplied network equipment to a state-owned telecom operator in the Middle-Eastern country in spite of sanctions put in place by the US. However, soon after that order was issued, the company managed to get a temporary reprieve from the trade restrictions, which would otherwise have barred the company from doing business in the U.S. Although the reprieve was only a temporary one and was contingent on ZTE co-operating with U.S. authorities on their investigations into the alleged violations.
While the initial reprieve was valid only until June 30th, it was later extended to August 30th. In what will be a major relief for the Chinese telecom equipment manufacturer, latest reports now indicate that the U.S. Dept. of Commerce has granted the company a further three-month relief from the trade restrictions. That being the case, ZTE will now have some breathing room until the 28th of November, before this matter comes up for consideration again. Announcing this through a declaration filed to the Hang Seng stock index in Hong Kong, the company said that it was doing everything within its power to “cooperate with relevant U.S. government departments to reach a final solution on the matter”.
While ZTE has also been accused by the U.S. federal government of having trade relations with other countries under U.S. sanctions, nothing has been proven as of yet. However, in this particular case, the FBI and other federal investigative agencies claimed that ZTE had used a complex network of shell companies to hide its exports to the state-run Iranian telecommunications company, TCI (Telecommunications Company of Iran) in spite of a trade embargo placed by the U.S. Either way, it now remains to be seen how things go from here, but for ZTE, which supplies network equipment to a number of smaller carriers in the country, the final judgment, which is now expected to come later this year, will be of critical importance.