ZTE shares suspended after US report on trading with Iran
07 March 2016 | Alan Burkitt-Gray
The US Department of Commerce is expected to impose restrictions on ZTE’s use of US chips and software because of the company’s trade links with Iran.
Multiple reports on Monday said that the Department of Commerce was likely to impose restrictions on Tuesday because, said the reports, the company had supplied hardware and software to Telecommunication Company of Iran in breach of US restrictions.
The Reuters news agency said that suppliers to the company will have to apply for licences “that will generally be denied, making it difficult for the Chinese company to buy American-made equipment and parts”.
Trading in ZTE shares was suspended on Monday over the concerns. The export contracts date back to 2012, said the reports. In January 2016 some sanctions were lifted after Iran reached a nuclear non-proliferation agreement with the US, China, Russia and a number of European countries.
Asked for a comment by Capacity, a representative of ZTE said: “ZTE noted recent media reports relating to a US Department of Commerce investigation. ZTE has been working with relevant US government departments on investigations, maintaining constant communication with relevant departments and is committed to fully addressing and resolving any concerns.
“ZTE will continue with normal operations while conducting comprehensive assessments and will be actively communicating with stakeholders. As a responsible business, ZTE strives to ensure all operational activities adhere to international trade practices and the laws and regulations of host countries.”