The U.S. Commerce Department is set to place export restrictions on Chinese telecoms equipment maker ZTE for alleged violations of U.S. export controls on Iran, according to documents seen by Reuters.
The restrictions will make it difficult for the company to acquire U.S. products by requiring ZTE's suppliers to apply for an export licence before shipping any American-made equipment or parts to ZTE. According to a Commerce Department notice that will be published next week in the U.S. Federal Register, the licence applications generally will be denied.
The restrictions will take effect Tuesday, Reuters has learned, and apply to any company worldwide that wants to ship American-made products to ZTE Corp in China. Those companies are not the target of the export curbs on ZTE.
"This is a significant new burden on trade with ZTE," a senior official at the Commerce Department told Reuters. The official declined to comment on whether the U.S. government might take further action against ZTE.
The company can appeal against the action.
ZTE, based in Shenzhen, said in a statement on Sunday that it was aware of media reports on U.S. export restrictions.