China's Telecom Giant Allowed to Export to Iran Until March

EghtesadOnline: ZTE has been granted an exceptional reprieve from the US Department of Commerce to continue exporting its telecoms equipment to Iran, following months of lobbying from the tech giant in Washington.

News ID: ۷۴۰۰۵۹

27 February 2017

The Bureau of Industry and Security which works under the US Commerce Department extended ZTE’s temporary license to sell telecoms equipment to Iran until March 29, despite the restrictions placed on the company for supposedly breaching US sanctions rules, Reuters reported.

US’ main issue with the company was the re-export of telecoms equipment sold to Iran which may have originated in the US; if true the company could face a heavy fine for breaching the Iran Sanctions Act passed  in 2012 which scuttled US businesses and foreign companies with a base in that country doing trade with Iran.

The latest change of heart in the new Trump administration offers the Chinese firm a specially designated period in which it can sell equipment to Iran, though shorter than the 90-day period it had originally requested, according to Financial Tribune.

ZTE said on February 14 that it was in negotiations with the US Commerce Department, the Treasury Department and the Department of Justice to quickly remove misgivings the US has about its export of telecoms equipment to Iran.

None of the US departments have said they will fine the Chinese firm over the supposed ignoring of the American sanctions. Many US restrictions have been in place since the revolution in Iran in 1979.

ZTE’s Iranian distributor Yas signed an agreement with the Chinese firm in January 2016 that obliges ZTE to export its range of Android-powered mobile handsets to Yas branded stores across Iran.

In January 2016 the Iranian distributor introduced the Blade V6 dual-SIM cellphone as the first officially imported ZTE smart device with official sales guarantees.

According to the company’s sales manager at the time, Mohammad Rishpour, ZTE had expressed interest in reentering Iran’s market three years ago.

The company had attempted to enter Iran’s mobile market in 2009 by collaborating with a local mobile company Pars Comtel, however that deal fell through.

It was reported that after those negotiations ZTE began working with Samtel, which is the main distributor of Huawei and Samsung mobile phones in Iran.

Trump’s Iran Policy

The deal offered to ZTE also gives some insight into the inner workings of the new occupant of the White House and its policy towards Iran.

According to one US-based attorney, Douglas Jacobson, the new offer “indicates a final settlement is imminent or is just a stopgap to give the new administration time on how to proceed [with regards to Iran],” Reuters reported him as saying.

Although the Trump administration has been outright critical of the government in Iran and its nuclear deal with the six world powers, including the US, it has not yet scuttled the historic nuclear agreement as Trump had often promised during his controversial election campaign.

In the deal between Iran and the five permanent members of the UN Security Council plus Germany, the six states agreed sanctions would be lifted in exchange for Iran’s cooperation over its disputed nuclear energy program.