According to documents seen by Reuters, the US restrictions are due to alleged violations of export controls on Iran by ZTE. The restrictions will make it difficult for the company to acquire US products, by requiring ZTE’s suppliers to apply for an export license before shipping any American-made equipment or parts to ZTE. According to a Commerce Department notice that will be published in the coming week in the US Federal Register, the license applications generally will be denied. The restrictions will take effect 08 March, Reuters has learned, and apply to any company worldwide that wants to ship American-made products to ZTE in China.
ZTE said it has been working with associated US government departments on investigations since 2012 and “is committed to fully address and resolve any concerns”.
In 2012, Reuters reported that ZTE had sold Iran’s largest telecom firm TCI a powerful surveillance system in 2011, in violation of sanctions against Iran. According to the news agency’s interviews and contract documents obtained, the deal included hardware and software products from a number of well-known American IT companies. The Commerce Department reportedly issued a subpoena to ZTE the day after the Reuters report.