Yesterday, the U.S. government placed export restrictions on Chinese telecoms equipment maker ZTE for alleged violations of U.S. export controls on Iran. 

According to Reuters, the U.S. Commerce Department has been investigating ZTE for alleged export-control violations following a report that the company had signd contracts to ship millions of dollars worth of hardware and software from some of America’s technology companies to Iran’s largest telecoms carrier, Telecommunication Co of Iran (TCI), and a unit of the consortium that controls it.

U.S. government places export restrictions on ZTE; China furious 1

ZTE’s attempt to sell technology to Iran would be violating U.S. export controls as the White House has long banned the sale of U.S.-made technology to Iran. Furthermore, companies such as Microsoft, IBM, Oracle and Dell were unaware of the Iranian contracts.

The new restrictions that the Commerce Department has set would force ZTE’s suppliers to apply for an export license before shipping any American-made equipment or parts to ZTE. The restrictions will take effect later today and will apply to any company worldwide that wants to ship American-made products to ZTE. 

Understandably, China is not happy about this. “China is opposed to the U.S. citing domestic laws to place sanctions on Chinese enterprises. We hope the U.S. stops this erroneous action and avoid damaging Sino-China trade cooperation and bilateral relations,” says Hong Lei, spokesman for the Chinese Foreign Ministry. Ever since the U.S. announced that it would be placing export restrictions on ZTE, trade in shares of ZTE has been suspended in Hong Kong and Shenzhen.

Source: Reuters, Business Insider

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