The US Commerce Department granted a temporary reprieve to ZTE Corp. (000063.CN) that allows China’s No. 2 telecommunications equipment maker to conduct business needed to maintain existing networks and equipment in the United States as it works toward the lifting of a US sales ban, Reuters reports.
The authorization from the US Commerce Department’s Bureau of Industry and Services, dated July 2 and seen by Reuters, runs until Aug. 1.
ZTE and the US Department of Commerce did not respond to requests for comment.
ZTE, which makes smartphones and networking gear, was forced to cease major operations in April after the United States slapped it with a supplier ban saying it broke an agreement to discipline executives who conspired to evade US sanctions on Iran and North Korea.
The company had also agreed to pay a US$1 billion penalty and put US$400 million in an escrow account as part of the deal to resume business with US suppliers, which provide almost a third of the components used in ZTE’s equipment.
The escrow agreement is still pending, according to a source. Until it is executed, ZTE cannot deposit the US$400 million in escrow necessary to get the ban lifted.
While the denial order is still in place, the authorization grants a waiver to some companies that do business with ZTE to do so for one month, a source told Reuters.
The waivers allow for a limited type of activity but does not authorize any new business.
ZTE shares have plunged 60 percent since trading resumed last month following a two-month hiatus, wiping out more than US$11 billion of the company’s market valuation.
The company announced a new board last week in a radical management shakeup as part of the deal with the US.
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