BIS allows a window for interim business with ZTE

The US Department of Commerce’s Bureau of Industry and Security (‘BIS’) has granted a general authorisation allowing certain transactions with Chinese telecommunications company ZTE until 1 August.

In April, BIS re-imposed a seven-year denial of export privileges order against ZTE that had been suspended in 2017. Following pressure from President Trump ahead of critical trade talks with China, BIS announced a replacement deal in June, which allows ZTE to conduct business in the US but with exacting conditions. ZTE must pay $1bn and place $400m in escrow before being removed from the Denied Persons List, and for the first time ever a US compliance team answerable to BIS will be embedded in the company for ten years. ZTE has already replaced its entire board of 14 directors in compliance with the new settlement.

The authorisation allows parties to conduct business with ZTE until the new settlement is in place. It covers:

• Continued operation of existing networks and equipment;
• Support to existing handsets;
• Cybersecurity research and vulnerability disclosure;
• The limited transfer of funds.

BIS’s notice can be found here:
https://www.bis.doc.gov/index.php/forms-documents/federal-register-notices-1/2244-zte-limited-service-authorization-1/file