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Suspension of Restrictions on Exports to Two ZTE Entities Extended

Friday, November 18, 2016
Sandler, Travis & Rosenberg Trade Report

The Bureau of Industry and Security has extended from Nov. 28 to Feb. 27 the expiration date of a temporary general license allowing 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.

Restrictions on such exports 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. BIS subsequently issued a temporary general license that suspended these restrictions and restored 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 has said that this license may be renewed if it 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 continues 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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