Department of Commerce eases ZTE restrictions

The Department of Commerce, through its Bureau of Industry and Security (BIS), as loosened the noose it placed around ZTE’s neck by banning the Chinese company’s access to U.S. technology. The BIS issued an order July 2 that allows ZTE to conduct business on a limited scale through August 1, 2018. It does not enable the company to re-engage in full operations.

The Department of Commerce, through its Bureau of Industry and Security (BIS), as loosened the noose it placed around ZTE’s neck by banning the Chinese company’s access to U.S. technology. The BIS issued an order July 2 that allows ZTE to conduct business on a limited scale through August 1, 2018. It does not enable the company to re-engage in full operations.

The order, signed by BIS Director of Exporter Services Karen H. Nies-Vogel, allows ZTE and suppliers to engage in transactions, including the issuance and receipt of payments, in the following circumstances:

  • To enable ZTE to maintain and support equipment, including software updates and patches, it has supplied based on contracts signed before April 15, 2018 (the date of the current Denial Order).
  • To enable ZTE to service and support cell phones available to the public before April 15.
  • To enable ZTE to disclose information regarding cybersecurity vulnerabilities and to conduct research in this area.

The order does not address when the ban will be fully lifted or how far along ZTE is in meeting the various obligations it must satisfy to reach this milestone. However, after replacing its board June 29, the company check off another compliance box by reporting that company president Zhao Xianming; executive vice presidents Xu Huijun, Pang Shengqing, and Xiong Hui; and Executive Vice President and CFO Shao Weilin had all resigned. The new board subsequently appointed Xu Ziyang company president. Wang Xiyu, Gu Junying, and Li Ying were named executive vice presidents, with Li Ying adding the CFO title.

Xu Ziyang was formerly president of ZTE’s Telecom Cloud and Core Network product line, according to the South China Morning Post.

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