March 23, 2016

U.S. Commerce Department Expected to Temporarily Lift Sanctions on Chinese Global Telecommunications Manufacturer ZTE Corporation

The U.S. Department of Commerce is expected to issue a temporary general license to lift sanctions on Chinese telecommunications equipment manufacturer ZTE Corporation just two weeks after the U.S. Commerce Department placed ZTE on the Entity List. The temporary general license will be effective from March 24, 2016 until June 30, 2016.

On March 8, 2016, the U.S. Department of Commerce placed Zhongxing Telecommunications Equipment (ZTE) Corporation, ZTE Kangxun Telecommunications Ltd. (ZTE Kangxun), and affiliates Beijing 8-Star International Co. and ZTE Parsian on the Entity List. This designation made it unlawful to export, reexport, or transfer U.S.-origin items to ZTE and these affiliates without an export license.

On Thursday, March 24, the Commerce Department is expected to add a general license that temporarily suspends the effect of the Entity List designation as it applies to ZTE and ZTE Kangxun (but the relief does not apply to ZTE’s affiliates Beijing 8-Star International Co. and ZTE Parsian). The temporary general license is expected to be effective from March 24, 2016 until June 30, 2016, and will be renewed “if the U.S. Government determines, in its sole discretion, that ZTE Corporation and ZTE Kangxun are timely performing their undertakings to the U.S. Government and otherwise cooperating with the U.S. Government in resolving this matter.” A draft of the general license is available here.

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This alert does not constitute legal advice and anyone seeking to do business with ZTE, its affiliated companies, or any other individual or business on the Entity List should consult legal counsel before doing so.

If you would like additional information about the issues addressed in this Client Alert, please contact Rich Matheny, who chairs Goodwin Procter’s National Security & Foreign Trade Regulation Practice, or the Goodwin Procter attorney with whom you typically consult.