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Commerce Department to restrict ZTE's access to U.S. made parts and components starting this week

Posted: , by Alan F.

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Commerce Department to restrict ZTE's access to U.S. made parts and components starting this week
Because ZTE has allegedly violated U.S. export controls to Iran, the Commerce Department is looking to restrict ZTE from importing U.S. made parts and components from anywhere in the world. Suppliers of U.S. sourced components will have to apply for an export license whenever they are supposed to ship product to ZTE. But don't let that fool you. A notice from the Commerce Department that will be published in the Federal Register next week, will say that most such license requests will be denied.

The restrictions against ZTE begin on Tuesday. While the suppliers are not the targets of the Commerce Department's displeasure, any company that wishes to ship U.S. made product to ZTE in China will have to comply with the new regulations.

ZTE was investigated by the Commerce Department after signing deals to ship millions of dollars of parts from some of America's top tech firms (like Microsoft, IBM, Oracle and Dell) to Iran's largest carrier, Telecommunication Co. of Iran. The U.S. companies said that they were unaware of the contracts to TCI and the consortium that runs that company.

Reuters
was able to see ZTE documents obtained by the Commerce Department that were marked "Top Secret." These papers revealed a scheme by ZTE on how it would ship U.S. parts to Iran in violation of U.S. export controls. Another internal ZTE document obtained by the Commerce Department and read by Reuters, relates how shell companies can be used to export sanctioned U.S. parts to other countries.

Now, ZTE is getting its just rewards for allegedly violating U.S. export controls. While it isn't clear how much the new restrictions will hurt the manufacturer's smartphone business, yet another ZTE document says, "Our company has many technologies and components that came from suppliers in the U.S. Lots of chips or software used in the products of our company is from U.S. suppliers." In other words, the new restrictions can put a damper on ZTE's handset business, unless it can source the parts it needs from non-U.S. companies. And even if it does, ZTE could end up paying higher prices or accepting slower delivery for them.


source: Reuters

12 Comments
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posted on 06 Mar 2016, 05:28

1. KeyserSoze (Posts: 138; Member since: 06 Oct 2014)


Sloimie connoivin' Choinace bastids, this means war!

posted on 06 Mar 2016, 05:52 1

2. Trakker (Posts: 283; Member since: 11 Feb 2016)


You've got some dumb people running the U.S.
There's already serious problems with manufacturing jobs going over to China, and not selling some of the components just gives some Chinese company yet more business.

posted on 06 Mar 2016, 06:57 4

3. TerryTerius (Posts: 1550; Member since: 10 Apr 2014)


This is about not selling parts to Iran, a country we have sanctions against. It doesn't have anything to do with the problem of outsourcing. What are we supposed to do since ZTE broke the law, just ignore it and keep selling them parts because it makes a bit of money for a few American companies?

Explain to me how that would be a smart decision?

posted on 06 Mar 2016, 06:59

4. garciano (unregistered)


never trust a Chinese company! ban them from selling their crap phones here.

posted on 06 Mar 2016, 09:13 1

5. lyndon420 (Posts: 3878; Member since: 11 Jul 2012)


Yeah. That also includes the Chinese companies that manufacture most of our phones right?

posted on 06 Mar 2016, 10:05 1

6. TerryTerius (Posts: 1550; Member since: 10 Apr 2014)


http://www.reuters.com/article/us-china-security-idUSKBN0UA07220151228

China has been inching ever closer towards strengthening their grip on their tech companies. They already own substantial stakes in Huawei and ZTE as well as most of their other major tech companies. I am highly wary of buying a Chinese phone at this point.

posted on 06 Mar 2016, 14:01

9. JumpinJackROMFlash (Posts: 449; Member since: 10 Dec 2014)


LOL! Too bad there are no phones not made in China, except maybe the korean.

posted on 06 Mar 2016, 15:16

10. TerryTerius (Posts: 1550; Member since: 10 Apr 2014)


You do realize that manufactured in China and designed by a Chinese company are two completely different things right?

posted on 06 Mar 2016, 19:34

11. joey_sfb (Posts: 5361; Member since: 29 Mar 2012)


Actually not much! All products that are manufactured in China are required to submit their blue print to the Chinese authority for approval.

Integrity in leadership is key and you guy has a chance to make it right.

posted on 07 Mar 2016, 05:04

12. TerryTerius (Posts: 1550; Member since: 10 Apr 2014)


It wasn't until fairly recently that the Chinese gov started making a push towards trying to get American companies to agree to having back doors installed in their products or other such ways to compromise security. And yes, there's a difference between trying to get Apple or Microsoft or whomever else to agree to that, and Chinese companies that've already been compromised from the start.

Either way it goes, there is still for the time being difference between manufacturing and design. But I do get what you're saying.

posted on 06 Mar 2016, 11:56

7. garciano (unregistered)


right!

posted on 06 Mar 2016, 14:00

8. JumpinJackROMFlash (Posts: 449; Member since: 10 Dec 2014)


Good thing it was a long time ago since ZTE was a relevant manufacturer.

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