By: John Black
The Commerce Department’s Bureau of Industry and Security (BIS) announced that it is extending the temporary general license for ZTE to effectively suspend ZTE’s denial list status until August 30, 2016. BIS originally put ZTE on its Entity List on March 8, 2016, based on BIS’ allegations that ZTE, including its senior management, established a complex network as part of its efforts to illegally transfer US technology to Iran and other prohibited destinations. The original denial prohibited all transfers from anywhere in the world of US origin items to ZTE as well as exports from outside the United States of non-US origin items with more than 25% US controlled content and certain foreign items produced directly from using US technology. The original listing was clearly the biggest EAR penalty ever imposed in my 32 years in this field.
As previously reported in this newsletter, on March 24, 2016 BIS announced a general license that effectively temporarily suspended until June 30, 2016, the denial against:
- Zhongxing Telecommunications Equipment (ZTE) Corporation (also referred to as ZTEC)
- ZTE Kangxun Telecommunications Ltd.
Now BIS has extended that general license for these two entities through August 31, 2016. It is easy to infer from this that ZTE must have originally refused to cooperate with BIS regarding the diversions to prohibited destinations, but after being placed on the Entity List ZTE rounded up a hoard of Washingotn lawyers and came crawling on its knees to BIS promising to cooperate and take decisive remedial actions. The extension indicates that ZTE is continuing to cooperate with BIS, at least as much as is necessary to get the suspension of its denial extended until the end of August.
These two ZTE entities remain on the EAR Entity List:
- Beijing 8 Star International Co.
- ZTE Parsian
For more information go to: http://www.bis.doc.gov/index.php/regulations/federal-register-notices#fr41799