ZTE has now been granted authorization by the Commerce Department’s Bureau of Industry and Security to support existing networks and equipment from July 2 until August 1. The news is accompanied by an ongoing debate and bids to reinstate more stringent sanctions, with legislators still expressing concerns about national security. Previously, the company had been forced to pay a $1 billion fine and place a further $400 million in escrow following a failure to follow through with an embargo imposed on North Korea and Iran. The Chinese company was also forced to agree to conditions which involved guarantees against further violations and the complete removal of executive-level employees as well as any other workers involved in the violations. Each of those conditions appears to have been met, including the firing of ZTE’s entire board of directors and the appointment of a new chairman.
Under the new authorization from the Commerce Department’s Bureau of Industry and Security, ZTE will be able to provide support for contracts that were signed on or before April 15. That should cover the gamut since that’s also the date on which ZTE was effectively blocked from operating within the country or dealing with U.S.-based partners. That includes the ability to push out any software updates that the manufacturer might have for devices sold in the country as long as they weren’t made available after April 15. Moreover, according to ZTE, the authorization reportedly allows for information about the security vulnerabilities in ZTE-owned or controlled “item” to be “disclosed” to the company. That should allow the Chinese company to get a better handle on protecting its “communication network and equipment.”
Although the news is good for ZTE, this isn’t necessarily going to be a permanent solution. The White House and current administration appear to be backing the company for now but a number of legislators remain unconvinced. Moreover, tensions will undoubtedly continue to rise due to the stalling of unfinalized trade negotiation discussions between the U.S. and China. ZTE, for its part, will face an uphill battle regardless of the outcome. The networking and smartphone manufacturing company reportedly faced losses of around $3 billion over the course of the sanctions, stemming from a loss of access to key components and chips. A substantial portion of those would ordinarily have been provided by U.S. chipset manufacturer Qualcomm.