According to a new report, it may soon become very difficult for ZTE to do business with US component companies.
Reuters says that the US Commerce Department is planning to place export restrictions on ZTE, meaning that any US companies shipping components to the China-based ZTE will need to apply for an export license before doing so. And according to a Commerce Department notice that’s expected to be published next week, those applications will typically be denied.
These export restrictions are the result of a US Commerce Department investigation to determine if ZTE used shell companies to ship US tech products to Iran, a violation of US sanctions. The US Commerce Department says that ZTE “planned and organized a scheme to establish, control, and use a series of ‘detached’ companies to illegally re-export controlled items to Iran in violation of US export control laws.” It’s said that ZTE had shipped hardware and software from American companies like Microsoft, IBM, Oracle, and Dell to the Telecommunication Company of Iran.
ZTE today responded to the report of its impending US export restrictions, saying that it is talking to all parties involved.
ZTE has placed a lot of focus on improving its US handset business lately, selling unlocked devices like the Axon Pro direct to US consumers. ZTE also sells its phones through some US carriers, like T-Mobile. We’ll have to wait and see how these US export restrictions affect ZTE, but it's probably safe to say that the company's future US dealings will be a bit more complicated.