A new U.S. export restriction against China’s ZTE Corp (000063.SZ) for alleged Iran sanctions violations is likely to disrupt the telecom manufacturer’s sprawling global supply chain and could create substantial parts shortages, according to sanctions experts.
Under the measure announced by the Commerce Department on Monday, U.S. manufacturers will be banned from selling components to ZTE, which is a major global supplier of telecom-networking equipment. In addition, foreign manufacturers will be prohibited from selling products containing a significant amount of U.S.-made parts to the Chinese company.
The Commerce Department, confirming the decision that was first reported by Reuters on Saturday, said ZTE planned to use a series of shell companies “to illicitly reexport controlled items to Iran in violation of U.S. export control laws.” It said ZTE acted “contrary to the national security or foreign policy interests of the United States.”
The original article can be found at reuters.com