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Restrictions on Exports to Two ZTE Entities Suspended

Thursday, March 24, 2016
Sandler, Travis & Rosenberg Trade Report

The Bureau of Industry and Security has issued a temporary general license that, effective March 24, suspends restrictions on exports of goods subject to the Export Administration Regulations from the U.S. to ZTE Corporation (Zhongxing Telecommunications Equipment Corporation) and ZTE Kangxun Telecommunications Ltd. These restrictions had been imposed March 8 when BIS placed these entities (and two others) on the Entity List following its determination that they were involved in a scheme to establish, control and use a series of shell companies to illicitly reexport controlled items to Iran.

The temporary general license will restore, through June 30, the license requirements, license review policies and license exceptions under the EAR that applied prior to March 8 to exports, reexports and transfers (in-country) to these two entities. BIS notes that this temporary general license is renewable if the U.S. government determines that these entities are timely performing their undertakings to the U.S. government and otherwise cooperating in resolving the matter.

For the other two entities (Beijing 8-Star and ZTE Parsian) there will continue to be a license requirement for all items subject to the EAR and a license review policy of presumption of denial. The license requirement applies to any transaction in which items are to be exported, reexported or transferred (in-country) to either of these entities or in which they act as purchaser, intermediate consignee, ultimate consignee or end-user. In addition, no license exceptions are available for exports, reexports or transfers (in-country) to these entities.

Click here to access a list of frequently-asked questions about these restrictions and their impact.

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