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Taiwan imposes restrictions on exports to China telecom company ZTE

Taiwanese suppliers will have to apply for a special license

ZTE offices in Nanjing, China.

ZTE offices in Nanjing, China. (AP photo)

TAIPEI (Taiwan News) – The Ministry of Economic Affairs (MOEA) followed the lead of the United States to impose restrictions on supplies to Chinese smartphone maker ZTE Corp. (中興通訊), reports said Saturday.

Earlier this month, the U.S. banned American companies from selling components to the Chinese telecom equipment maker for seven years, amid concern that the company poses a threat to national security. The official reason was that the company had shipped U.S. technology to Iran in violation of sanctions.

While not going as far as imposing an outright ban, Taiwan’s MOEA announced it was setting restrictions on strategic high technology exports to ZTE and to its affiliate, ZTE Kangxun Telecommunications Ltd. (中興康訊).

Taiwanese companies planning to export to ZTE would first have to apply for an official license to do so before reporting the export plans to customs, the MOEA said Friday evening.

If there was no suspicion that the exported products would be used for any nefarious project, such as use in military applications, the review process would last three to five days, the MOEA said.

However, if there was any doubt about the exports, the review might take 10 to 15 days.

The export licensing system for strategic high-tech products has been in place since 1995.

One of the Taiwanese companies potentially affected by the government restrictions on ZTE, MediaTek Inc. (聯發科), said Saturday it was preparing the necessary documentation to apply for a license to supply products to the Chinese company, the Apple Daily reported.