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US Curbs China’s ZTE Exports Over Iran Business Allegations

International trade practice group leader Kay Georgi recently spoke with Reuters to address a new US export restriction against a telecom manufacturer that is expected to have major implications across the global trade market.

The restriction, announced on March 7, impacts China’s ZTE Corp, a supplier of telecom-networking equipment around the world, and will ban US and non-US companies from selling components and software subject to US export controls to ZTE. Foreign manufacturers are also prohibited from selling non-US products that contain more than de minimis (more 25% by value) of US-made parts and software to the telecom giant. The restriction follows news of alleged Iran sanctions violations by ZTE.
Many US companies manufacture outside the United States and such non-US products may contain less than 25% U.S. content and not be subject to the prohibition. These companies can continue to sell – after carefully assessing their products to make sure the US content is truly de minimis. On the other hand, the US decision could prompt suppliers to halt even sales of non-US products that are still allowed, Kay told Reuters. "When you get placed on one of these lists nobody wants to do business with you at all," she said.
According to Reuters, ZTE is among one of the largest companies that has been sanctioned by the Commerce Department with a near-total export ban, and the move is expected to impact several leading US technology companies. ZTE is the fourth largest smartphone vendor in the US.
To read the full story from Reuters, click here.


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