US lawmakers call on Commerce Department to clarify how ZTE ban affects US companies buying its products

PUBLISHED : Tuesday, 26 June, 2018, 11:10am
UPDATED : Tuesday, 26 June, 2018, 11:35pm

A group of lawmakers behind a campaign to reinstate the US ban on ZTE Corp have called on the Commerce Department to clarify how the sanctions affect American companies using products made by the Chinese telecom giant.

In a letter sent to the Commerce Department on Monday, Republican Senators Marco Rubio and Tom Cotton, together with Democrat senator Chris Van Hollen, asked the department to provide guidance on whether the US companies using ZTE software, hardware or technology are violating the current ban on the Chinese telecoms company.

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They also asked the department to provide guidance to US companies wanting to replace ZTE products and services with other suppliers.

The US banned ZTE from buying any American electronics parts after the company violated US trade laws by selling products to US-sanctioned Iran and North Korea, then covering it up and lying about it.

The ban resulted in the company shuttering its business, but US President Donald Trump then stepped in to broker a deal to remove the ban under certain conditions.

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The lawmakers’ request comes amid push back by Congress on the deal the Commerce Department struck with ZTE to save the Chinese company from the brink of collapse. The same lawmakers last week led an effort to pass an amendment in a defence bill to reinstate the ban on ZTE, citing national security concerns.

Negotiations between Congress and the White House are continuing over the fate of ZTE after a meeting Republican senators had with Trump seeking a compromise deal that would keep ZTE alive did not produce any results.

In the Monday letter, the Republican and Democratic lawmakers sought guidance for US telecommunications operators and other customers wanting to remove ZTE components from their network infrastructure and replace them with products from other suppliers in the market.

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The “reluctance to clarify such uncertainty is patently unjust to customers who have had no part in the malign conduct that caused ZTE to be penalised in the first place,” the senators wrote in the letter.

“It is also profoundly unfair to other suppliers who, unlike ZTE, have complied with US export controls and sanctions laws. Moreover, enabling ZTE to continue effectively benefiting from such uncertainty at the expense of other market participants runs directly counter to US foreign policy, national security interests, and values,” they said.

In last week’s meeting with Republican Senators, Trump urged them not to undermine his deal with ZTE, stressing that it was part of a broader geopolitical negotiating strategy.

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They discussed options that would preserve a ban on US government purchases of ZTE equipment, which is considered a threat to national security, while lifting the ban on all US exports to the company.

Some lawmakers, while concurring that Trump’s deal was part of a broader negotiating strategy, do not agree that the national security issue is negotiable.