US authorities are set to lift export restrictions they recently imposed on China's ZTE, which stood accused of violating sanctions on Iran, according to press reports. (See ZTE: What On Earth Were They Thinking? and ZTE Faces Trade Restrictions Over Iran Links.)
The US Commerce Department is said to have been in "constructive" negotiations with ZTE Corp. (Shenzhen: 000063; Hong Kong: 0763) over the past week about a temporary lifting of the ban, according to a report from Reuters.
"As part of the effort to resolve the matter, and based upon binding commitments that ZTE has made to the US government, Commerce expects this week to be able to provide temporary relief from some licensing requirements," said a Commerce Department official quoted in the Reuters story.
The export restrictions will have made it difficult for ZTE to obtain hardware and software developed by US companies, with ramifications for the Chinese vendor's supply chain.
Earlier press reports claimed the Chinese manufacturer had signed contracts worth millions of dollars to supply Iran's biggest phone company with gear featuring US-made components.
According to Reuters, the Commerce Department has said the "relief" will only be maintained if ZTE abides by commitments it has made to the US government.
Details of those commitments are due to be published this week in the US Federal Register, according to the report.
Following the imposition of the ban earlier this month, ZTE said it was committed to complying with the laws and regulations of the jurisdictions in which it operates and that it has been cooperating with US agencies as required.
But the company's shares have not traded in Hong Kong since news of the ban first broke and ZTE has also delayed the release of its latest annual results until it deems the matter to have been resolved.
ZTE is not the only Chinese company that has come under fire from US authorities.
US service providers have been dissuaded from using equipment made by ZTE as well as larger rival Huawei Technologies Co. Ltd. amid government concerns about the companies' close links with the Chinese state.
— Iain Morris, , News Editor, Light Reading