Reed Smith Client Alerts

New developments in the ZTE settlement with the U.S. government have resulted in the imposition of a 7-year denial of export privileges. This denial order will have a significant impact on the U.S. semiconductor, telecommunications and technology industries. This alert outlines the scope of the denial order and the impact on U.S. and foreign companies supplying goods, services, and technology to ZTE.

Authors: Michael J. Lowell

Earlier today, the Bureau of Industry and Security (BIS) announced the imposition of denial of export privileges (Denial Order) against Zhongxing Telecommunications Equipment Corporation, of Shenzhen, China (ZTE Corporation) and ZTE Kangxun Telecommunications Ltd. of Hi-New Shenzhen, China (ZTE Kangxun) (collectively, ZTE).

Denial Orders are issued by the Assistant Secretary for Export Enforcement of BIS denying the export privileges of a company or individual. A denial of export privileges prohibits a person from participating in any way in any transaction subject to the EAR. Furthermore, it is unlawful for other businesses and individuals to participate in any way in an export transaction subject to the EAR with a denied person.