On November 18, 2016, the Department of Commerce’s Bureau of Industry and Security (“BIS”) announced that it extended its temporary general license for exports, reexports, and in-country transfers to Zhongxing Telecommunications Equipment Corporation (ZTE Corporation) and ZTE Kangxun. The temporary general license benefitting these two ZTE entities was scheduled to expire on November 27, 2016, but has now been extended to February 27, 2017. This authority is necessary because the entities – along with two other ZTE affiliates – were placed on BIS’ Entity List on March 8, 2016. The extension of the temporary general license allows exporters and reexporters to continue using the Export Administration Regulations’ No License Required (“NLR”) authority and license exceptions that were available to ship to these entities before they were added to the Entity List. The other two ZTE entities on the Entity List that do not benefit from the temporary general license remain subject to additional restrictions.
Today’s announcement is the third time that BIS has extended the temporary general license, which was first granted on March 24, 2016. BIS has indicated willingness to continue extending the temporary general license if the two entities continue to cooperate with the US government to resolve the underlying matter that caused them to be added to the Entity List – ZTE’s alleged creation of a scheme to circumvent US sanctions and export controls by reexporting controlled items to Iran. For more information, please see Steptoe’s advisory.