China's ZTE faces restrictions over alleged Iran violations

zte phones Image copyright Getty Images
Image caption ZTE is China's second-largest telecommunications companies

Chinese firm ZTE has said its US suppliers must now apply for a licence to provide the firm with any materials.

The announcement came after the US announced restrictions against ZTE for alleged violations of US export controls on Iran.

China said on Tuesday it held "resolute opposition" to the move.

ZTE is the second-biggest supplier of telecommunications equipment in China after Huawei.

The Shenzhen firm is known for its smartphones, however, it also makes semiconductors, and other products.

It was estimated to hold about 3.5% of the world's smartphone market last year and US based Qualcomm is one of its biggest suppliers.

Trade halted

Image copyright Getty Images

On Sunday, Reuters news agency reported the the US was set to place export restrictions on ZTE for allegedly violating sanctions on Iran.

The Chinese firm's Hong Kong-listed shares were then halted from trade on Monday and have not resumed trading since.

The US Commerce Department then said in a statement on Monday that ZTE, and its related companies, had set up a scheme to circumvent sanctions and export controlled items to Iran.

ZTE Corporation, together with its subsidiaries ZTE Kangxun Telecommunications, ZTE Parsian and Beijing 8-Star International have all been added to the so-called entity list by the US, with effect from 8 March 2016.

China's commerce ministry said on Tuesday the move would "severely affect normal operations of Chinese companies".

"China will continue negotiating with the US side on this issue," it said on its website.

ZTE said on Wednesday it was "conducting a thorough assessment on the potential impacts of the restriction measures on the business and [its operations]".

In 2012, A US congressional panel warned that both ZTE and Huawei posed a security threat to the US. The warning followed an investigation into the two companies, however both firms denied the accusations.

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