ZTE Gets Temporary Reprieve From U.S. Ban Over Iran Sanctions Violations

Monday, 09 Jul, 2018

The new authorization from the Commerce Department will be in effect from July 2 to August 1, according to a document obtained by Bloomberg.

ZTE lost the deal because it is barred from buying United States technology, and Ericsson AB won the €600 million (RM2.82 billion) contract instead, people with knowledge of the matter said, asking not to be identified because it has not been announced.

Chinese telecoms equipment manufacturer ZTE has announced a new CEO as it looks to get back on track with its USA operations. The company has also named a new CFO, CTO and head of human resources.

ZTE Corp. has appointed a 20-year veteran to lead the Chinese telecoms firm as the US weighs an end to a seven-year ban.

ZTE previously pleaded guilty and agreed to pay a $1 billion penalty in March 2017 for having shipped equipment to Iran and North Korea in violation of USA sanctions. Previously, Xu served as the CEO of ZTE's German operation, at a time when the Chinese company signed a five year service contract with German telecoms operator E-Plus, displacing the previous provider Alcatel-Lucent. ZTE shares in Hong Kong rose about 2% and Ericsson gained as much as 1.1% in early trading in Stockholm.

An insider source told Reuters a memo was sent out on July 3 announcing the removal of seven other executives, without providing a reason.

In the letter, which was circulated online on Saturday, Zhang recounted his 18 years at ZTE and said he had no responsibility in ZTE's compliance violations.

The Shenzhen company last week appointed Li Zixue as its new chairman. Because of the ban, ZTE had ceased all US operations in May. The company's installment of new leadership comes just a few days after its previous board of directors resigned.