In March 2016, ZTE Corporation and ZTE Kangxun (collectively ZTE) were placed on the U.S. Department of Commerce’s Bureau of Industry and Security (BIS) Entity List after corporate documents revealed alleged failure to comply with U.S. sanctions against Iran. While placement on the Entity List would ordinarily result in a ban on conducting business with the U.S., President Obama issued a Temporary General License (TGL) on March 24, 2016, which authorizes the export, reexport and transfer (in country) of items to ZTE. The TGL was implemented by amending the Export Administration Regulations (EAR) with the addition of Supplement No. 7 to part 744.
The TGL has since been amended three times in June, August and November 2016, with each revision extending the TGL to allow ZTE to continue to conduct business with the U.S. ZTE’s third TGL was extended on November 18, 2016 and isset to expire on February 27, 2017. All extensions have been granted pending ZTE’s timely cooperation with the U.S. Government in resolving ZTE’s alleged noncompliance with U.S. sanctions.
On February 24, 2017, BIS announced its decision to extend the TGL until March 29, 2017. By extending the TGL, U.S. companies may continue to export and reexport under the Export Administration Regulations (EAR) where no license is required (NLR) or where there is an applicable license exception available.
For guidance on navigating any of the U.S. export control and sanctions programs and ensuring your business is in compliance with U.S. export regulations, contact Cortney Morgan, Grant Leach, Linda Tiller, or Husch Blackwell’s International Trade & Supply Chain team.