Trade restrictions that were levied against Chinese smartphone maker ZTE earlier this month will be temporarily lifted, a Commerce Department official said.
According to a report from the Wall Street Journal, the Commerce Department will provide relief from the sanctions based on commitments the company has made to the U.S. government.
A senior Commerce Department official told the Wall Street Journal talks between the government and ZTE are “active” and “constructive.” However, the official also stressed the relief from restrictions would be temporary and is predicated on ZTE following through with its promises.
Additional details of the relief agreement will be published in the Federal Register later this week.
In addition to helping ZTE, the easement of restrictions also serves as a step toward appeasing the Chinese government, which was angered by the U.S. government’s decision to impose the sanctions.
The trade controls – which required any ZTE supplier that wanted to ship America-made products to the company in China to apply for an export license – came in response to alleged export-control violations by ZTE.
According to U.S. officials, the ZTE signed contracts agreeing to ship several million dollars’ worth of hardware and software from a high-profile American tech companies – including Microsoft, IBM, Oracle and Dell – to Iranian telecommunications carrier Telecommunication Co of Iran (TCI) despite U.S. trade restrictions with that country.
In response to the initial sanction news, trading of ZTE shares on the Hong Kong stock market has been suspended since March 7.
ZTE has also postponed the release of its full year 2015 results, which it could not immediately finalize in light of the restrictions, the Wall Street Journal said.
Filed Under: Industry regulations