China ZTE's temporary sanction relief extended by the U.S.

The U.S. government decided to extend thetemporary lifting of sanctionsonZTECorp.through Aug. 30, as the Chinese maker of telecommunications equipment tries to rebuild its reputation after beingaccused of violating trade rules.

The U.S. Commerce Department announced the decision in a statement posted online Monday; It didn’t cite specific reasons for the decision.

The extension of temporary relief is good news for ZTE, whichhas been scrambling to cope with the potential damage on its global operations and brand image from its alleged export-control violation.In April, the companyreplaced three of its most senior executives, including its chief executive.

The U.S. imposed trade sanctions on ZTE in early March, alleging the company violated rules restricting exports of U.S. technological goods to Iran.The move hindered the Chinese company’s ability to procure U.S. components and software and created tension between Beijing and Washington. But in late March, just two weeks after announcing its sanctions, the U.S. Department of Commerce temporarily lifted the restrictions through June 30. At the time, the department said the temporary license it was granting ZTE would be renewable if the Chinese company fully cooperated with Washington.

“This extension of relief reflects ZTE’s continuing efforts to fulfill its commitments to create a best-in-class compliance program. It also recognizes ZTE’s determination to cooperate with authorities, resolve the continuing investigation and share information as requested,” ZTE Chairman and President Zhao Xianming said in a statement. Mr. Zhao assumed his current roles in April when ZTE replaced its management team.

In late April, ZTE hired a team of U.S. export-control experts at consulting firm PricewaterhouseCoopers to advise the company, according to a person familiar with the matter. The PwC team is led byJeannette Chu,who had previously worked for the Commerce Department as a policy adviser on export control and foreign policy issues, the person said.

ZTE, which is based in the southern Chinese city of Shenzhen, isa major manufacturer of mobile phones and telecom-networking equipment like base stations. In the U.S. last year, the company was the fourth-largest smartphone vendor with a 7.2% market share, according to research firm Canalys.

(THE WALL STREE JOURNAL)