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U.S. Restrictions on Exports to Two Mainland Chinese Entities Suspended

The U.S. Department of Commerce’s Bureau of Industry and Security has issued a temporary general licence that, effective 24 March, suspends restrictions on exports of goods subject to the Export Administration Regulations from the United States to ZTE Corporation (Zhongxing Telecommunications Equipment Corporation) and ZTE Kangxun Telecommunications Ltd. These restrictions had been imposed on 8 March 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 re-export controlled items to Iran. The restrictions were suspended after ZTE and ZTE Kangxun filed a request with BIS to remove or modify their listing in the Entity List and made certain commitments to the agency regarding their operations and compliance with the EAR.

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

For the other two entities (Beijing 8-Star and ZTE Parsian) there will continue to be a licence requirement for all items subject to the EAR and a licence review policy of presumption of denial. The licence requirement applies to any transaction in which items are to be exported, re-exported 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 licence exceptions are available for exports, re-exports or transfers (in-country) to these entities.

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