The U.S. Department of Commerce Bureau of Industry and Security (BIS) has announced that it intends to issue a general license for exports, reexports (shipments from one foreign country to another foreign country), and in-country transfers of items subject to the Export Administration Regulations (EAR) to Zhongxing Telecommunications Equipment Corporation (ZTE) and its affiliate, ZTE Kangxun Telecommunications Ltd. (ZTE Kangxun). The general license is expected to take effect on March 24, 2016, upon its publication in the Federal Register.
ZTE and ZTE Kangxun were added to BIS's Entity List on March 8, 2016, and, as a result of that listing, BIS imposed a license requirement on the export, reexport, and in-country transfer of any item subject to the EAR to ZTE and ZTE Kangxun.1The general license will "suspend" the license requirement imposed by the Entity List and will return the license requirement status to the same level that existed prior to the inclusion of ZTE and ZTE Kangxun on the Entity List. Thus, if an export to ZTE was authorized as no license required (NLR) prior to the March 8 listing, then that export also will be eligible to be sent NLR to ZTE after the March 24 publication of the general license in the Federal Register. Further, license exceptions may again be used for exports, reexports, and in-country shipments to ZTE and ZTE Kangxun of items subject to the EAR.
The general license is in effect through June 30, 2016, and may be renewed by BIS. While ZTE and ZTE Kangxum remain on the Entity List, the license requirement imposed by the listing will be superseded, at least through June 30, by the March 24 general license. Restrictions on the export, reexport, and transfer to the two additional entities added to the Entity List with ZTE—ZTE Parsian and Beijing 8-Star—remain in effect.
If you would like to discuss this matter, please contact Josephine Aiello LeBeau, 202-973-8813, jalebeau@wsgr.com; Anne Seymour, 202-973-8874, aseymour@wsgr.com; or any member of the export control and economic sanctions regulatory practice at Wilson Sonsini.
