Report: U.S. to 'temporarily' lift ZTE export restrictions

The U.S. expects to temporarily lift export restrictions against ZTE, The Wall Street Journal reported.

Citing an unnamed senior Commerce Department official, the Journal said the sanctions will likely be lifted later this week following "active" and "constructive" talks between the U.S. government and the Chinese electronics vendor. The restrictions "would be maintained only if ZTE is abiding by its commitments to the U.S. government," the official said.

ZTE was slapped with the sanctions two weeks ago for allegedly violating U.S. export controls on Iran. The Commerce Department said they had uncovered plans by ZTE to use multiple shell companies to re-export controlled items to Iran, which would violate U.S. control laws.

The sanctions require the Chinese manufacturer's suppliers to apply for an export license before shipping any U.S.-made equipment or parts to ZTE. The flap has not only increased tensions between Washington and Beijing, it threatens to hurt the businesses of ZTE's American partners including Qualcomm, Broadcom and Intel. U.S. companies account for 43 percent of the components and services it sells, according to a recent Bloomberg report.

ZTE is the fourth-largest smartphone vendor in the U.S. and has emerged as the only Chinese brand with substantial U.S. sales. It recently said it expected to report a 43.5 percent increase in full-year net profit in 2015.

But the company has something of a dubious history regarding its export policies. The Commerce Department investigated ZTE for alleged export-control violations in 2012 following reports it had inked deals to ship hardware and software from American tech businesses to Telecommunication Co of Iran (TCI), that country's largest telecom operator.

ZTE has spent $5.1 million on political lobbying in the United States since 2012 in an effort to address national security concerns and discuss matters including trade relations, supply chains and cyber-security issues, Reuters recently reported. Among its lobbying targets have been legislators in both the House and Senate, the Department of Homeland Security, the Department of Commerce, the State Department and the National Security Agency.

For more:
- see this Wall Street Journal report

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