On July 2, 2018, the Department of Commerce’s Bureau of Industry and Security (BIS) published a General Authorization for certain activities with ZTE. BIS had previously issued a Denial Order against ZTE on April 15, 2018 for the company’s failure to discipline personnel involved in prior violations of sanctions and export control laws (please the blog post from June 25th with more details).
The General Authorization permits the following through August 1, 2018 [when ZTE is expected to be in full compliance in replacing offending Board and Management personnel). After August 1st, BIS is expected to lift the Denial Order permanently (assuming ZTE takes its compliance obligations seriously this time around).
All persons, except those located in Country Group E (Cuban, Iran, North Korea, Sudan and Syria), can now undertake:
- Continued operation of existing networks and equipment, including software updates and patches, under contracts in force prior to April 15, 2018;
- Continued service and support to handsets, including software updates and patches, for ZTE phone models in existence prior to April 15, 2018;
- Cybersecurity research and vulnerability disclosures can be made to ZTE where such is critical to maintaining the integrity and reliability of communications networks and equipment; and
- BIS authorizes persons to receive payment to or from ZTE for transactions lawful under this authorization.