Department of Commerce to Ease License Requirement for Exports, Reexports, and Transfers to ZTE as of March 24, 2016

The U.S. Department of Commerce Bureau of Industry and Security (BIS) has announced that it intends to issue a general license for exports, reexports (shipments from one foreign country to another foreign country), and in-country transfers of items subject to the Export Administration Regulations (EAR) to Zhongxing Telecommunications Equipment Corporation (ZTE) and its affiliate, ZTE Kangxun Telecommunications Ltd. (ZTE Kangxun). The general license is expected to take effect on March 24, 2016, upon its publication in the Federal Register.

ZTE and ZTE Kangxun were added to BIS's Entity List on March 8, 2016, and, as a result of that listing, BIS imposed a license requirement on the export, reexport, and in-country transfer of any item subject to the EAR to ZTE and ZTE Kangxun.1 The general license will "suspend" the license requirement imposed by the Entity List and will return the license requirement status to the same level that existed prior to the inclusion of ZTE and ZTE Kangxun on the Entity List. Thus, if an export to ZTE was authorized as no license required (NLR) prior to the March 8 listing, then that export also will be eligible to be sent NLR to ZTE after the March 24 publication of the general license in the Federal Register. Further, license exceptions may again be used for exports, reexports, and in-country shipments to ZTE and ZTE Kangxun of items subject to the EAR.

The general license is in effect through June 30, 2016, and may be renewed by BIS. While ZTE and ZTE Kangxum remain on the Entity List, the license requirement imposed by the listing will be superseded, at least through June 30, by the March 24 general license. Restrictions on the export, reexport, and transfer to the two additional entities added to the Entity List with ZTE—ZTE Parsian and Beijing 8-Star—remain in effect.


1See WSGR Alert, "License Required for All Exports, Reexports, and Transfers to ZTE Corporation as of March 8, 2016," March 7, 2016, available at: https://www.wsgr.com/WSGR/Display.aspx?SectionName=publications/PDFSearch/wsgralert-ZTE-corporation.htm.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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