MWC: Americans give ZTE an extra month

By:
Alan Burkitt-Gray
Published on:

The US Department of Commerce extends ZTE’s reprieve from export restrictions until 29 March as settlement nears

The US government has given ZTE another month to export US-made hardware and software with its products as the two sides continue to negotiate a settlement.

The embargo on ZTE’s use of products licensed from US products was first imposed in March 2016 when the US Department of Commerce (DoC) found evidence that the Chinese company was smuggling hardware and software to Iran through shell companies.

The embargo had been extended in stages until today, 27 February, the first day of Mobile World Congress (MWC) in Barcelona, when ZTE and the rest of the world’s mobile equipment makers meet to sell their products to operators.

If the DoC hadn’t granted an extension, it’s hard to see how ZTE would have been able to offer any of its kit to mobile network operators: virtually all of it uses the US software and hardware – from companies such as Cisco, Dell, Intel, Microsoft, Oracle, Qualcomm and Symantec.

The latest reprieve allows ZTE to continue to sell the kit not only through MWC but until 29 March. But it is widely expected that by then ZTE and the US will have reached a settlement, which ZTE admitted two weeks ago will “to result in penalties imposed on the company by relevant US government departments”.

One of the penalties has already been imposed. Last week ZTE announced quietly that former CEO Shi Lirong had finally left the company’s board. Shi was one of the executives whose signatures were on the documents planning the conspiracy to export to Iran via shell companies.

He stepped down from the top position after the March 2016 revelations, but was still advising the board. ZTE paid tribute to Shi’s contribution to the company but made no mention of his role in the conspiracy.