BIS Grants Temporary Relief for Two ZTE Companies and their Suppliers

Mar 24, 2016

Reading Time : 2 min

Relief Granted

In its new rule, BIS indicates that ZTE Corporation and ZTE Kangxun made certain binding (undisclosed) commitments to the U.S. government that justify a restoration of BIS’s earlier licensing policy. As such, all licensing requirements, review policies and exceptions regarding exports, reexports and transfers (in-country) to ZTE Corporation and ZTE Kangxun that were in effect on March 7, 2016, will now continue to remain in effect until June 30, 2016. For example, if exporters had exported items to these companies under the No License Required (NLR) exception on or before March 7, 2016, they may continue doing so until June 30, 2016.

Limitations

The temporary general license does not relieve persons of other prohibitions under the Export Administration Regulations (EAR), including those under General Prohibition 5, which provides that persons “may not, without a license, knowingly export or reexport any item subject to the EAR to an end user or end use that is prohibited by part 744 of the EAR.” Additionally, the new temporary general license does not relieve persons of an obligation to apply for export, reexport or in-country transfer licenses that are potentially required under other provisions of the EAR.

Exporters should also note that the new temporary general license applies only to ZTE Corporation and ZTE Kangxun—it does not apply to Beijing 8-Star International Co. or ZTE Parsian, the other entities BIS added to its Entity List on March 8, 2016. The temporary general license is in effect from March 24, 2016 through June 30, 2016. The U.S. may or may not renew the temporary general license beyond June 30, 2016.

Precedent for Other Listed Entities

BIS had taken the position that documents it published on its website at the time of the Entity List designation clearly established a “a ZTE-developed scheme to violate U.S. export control laws by establishing, controlling, and using a series of “detached” (e.g., shell or front) companies to illicitly reexport controlled items to sanctioned countries without authorization.”

Yet, with the sudden granting of a temporary general license, it is unclear what precedent this may establish to allow other listed entities to apply for removal or a temporary general license. The assistant secretary for Export Administration indicated in remarks yesterday that the change in the decision with regard to ZTE’s listing did not necessarily create precedent because it was a specific case that involved a large company with large issues and it was a significant matter.

Share This Insight

Categories

Previous Entries

Akin Trade Law

February 9, 2023

Read More

Akin Trade Law

2023-01-26

At the end of last year, World Trade Organization (WTO) members agreed that the 13th Ministerial Conference (MC13) of the WTO will take place in Abu Dhabi, the capital of the United Arab Emirates (UAE), in February 2024. There is no doubt that the WTO is facing headwinds and is in need of a vigorous push forward. The UAE’s success in transforming itself into a global trade and digital hub and a leader in services trade could serve to drive a successful outcome at MC13.

...

Read More

Akin Trade Law

2023-01-17

On December 21, 2022, the appeal arbitrators in the Colombia – Frozen Fries (DS591) World Trade Organization (WTO) dispute circulated their award (the “Award”). This was the second appeal conducted under Article 25 of the WTO’s Dispute Settlement Understanding (DSU) and the first appeal under the Multi-Party Interim Appeal Arbitration Arrangement (MPIA), a framework created by a group of WTO members to overcome the challenges posed by the non-operational Appellate Body.

...

Read More

Akin Trade Law

2022-02-10

The United Kingdom just issued a new statutory instrument, effective immediately, which extends the authority to designate persons and entities under the U.K. sanctions against Russia.

...

Read More

Akin Trade Law

2020-06-10

We are pleased to share a recording of Akin Gump’s webinar, “Protecting the Crown Jewels - New U.K. National Security Rules for Foreign Investment in a Post-COVID-19, Post-Brexit World.

...

Read More

Akin Trade Law

2020-05-07

The clock is ticking down to the entry into force of the United States-Mexico-Canada Agreement (USMCA) on July 1, 2020.  Leading up to that date, businesses have a unique advocacy opportunity to influence the implementing regulations and associated processes, such as legislative changes to Mexico’s domestic laws. Additionally, the Office of the U.S. Trade Representative (USTR) and U.S. Customs and Border Protection (CBP), along with their Mexican and Canadian counterparts, have begun issuing guidance for the trade community seeking to obtain the benefits of the agreement. At this time, these guidance documents include a petition process for automakers to request alternative staging for the automotive rules of origin as well as general interim implementation instructions for USMCA entries. Still to come are regulations regarding the automotive labor value content requirements and Uniform Regulations regarding the customs provisions. Akin Gump and our partners at Dorantes Advisors in Mexico City have jointly developed brief summaries of these guidance documents and a timeline of key actions still to take place prior to entry into force. The materials are available here in both English and Spanish.

...

Read More

Akin Trade Law

2020-03-02

Last week, in a highly anticipated decision, the U.S. Court of Appeals for the Federal Circuit (Federal Circuit) concluded that Section 232 of the Trade Expansion Act of 1962 does not offend the non-delegation doctrine. To most observers, the ruling does not come as a surprise, but the story on Section 232 and the non-delegation doctrine is not yet over.

...

Read More

© 2024 Akin Gump Strauss Hauer & Feld LLP. All rights reserved. Attorney advertising. This document is distributed for informational use only; it does not constitute legal advice and should not be used as such. Prior results do not guarantee a similar outcome. Akin is the practicing name of Akin Gump LLP, a New York limited liability partnership authorized and regulated by the Solicitors Regulation Authority under number 267321. A list of the partners is available for inspection at Eighth Floor, Ten Bishops Square, London E1 6EG. For more information about Akin Gump LLP, Akin Gump Strauss Hauer & Feld LLP and other associated entities under which the Akin Gump network operates worldwide, please see our Legal Notices page.