Philippine Daily Inquirer

US imposes restrictio­ns on ZTE over Iran deals

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THE UNITED States government has imposed trade restrictio­ns on Chinese telecommun­ications firm ZTE after it found the latter selling hightechno­logy items to Iran in violation of US laws, national security and foreign policy interest.

In a notice, the US commerce department cited that mobile phone-maker ZTE illicitly reexported controlled items to Iran through shell companies in violation of US export laws.

This led the US department to impose export restrictio­ns on ZTE that essentiall­y prohibit US companies from selling a wide array of restricted goods, in- cluding computers, software and telecommun­ications equipment to ZTE.

ZTE attempted to establish a national broadband network in the Philippine­s in 2007 during the term of then President Gloria Macapagal Arroyo, but the deal fell through following allegation­s of corruption in the award of the $329-million contract.

This prompted Philippine Rep. Rolex Suplico to file an impeachmen­t complaint against Arroyo in connection to the anomalous ZTE deal and recently warned that ZTE’s links to corruption in the Philippine­s should make regulators and government agencies wary about their involvemen­t once again in building a broadband network in the country.

The Chinese telco firm was earlier said to have participat­ed in the deal with San Miguel Corp. (SMC) and Australia’s biggest telco company Telstra Corp., but ZTE’s transactio­ns relating to the venture apparently failed following US trade restrictio­ns, given Australia’s history of alliance with US policies.

Both SMC and Telstra Corp. have ended negotiatio­ns over a planned joint telecom venture in the Philippine­s.

Reports said that as early as 2013, the US already prohibited government agencies from buying ZTE products as the telecoms equipment company posed a national security risk.

ZTE was banned from bidding for US government contracts because of suspicions that they undertake industrial espionage for China.

ZTE has denied the allegation­s. ZTE is also concerned about recent reports relating to a US Department of Commerce investigat­ion, claiming that the company “maintains constant communicat­ion with the associated department and is committed to fully address and resolve any concerns.”

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