Taiwan tells firms to seek approval for trading with ZTE

The Taiwanese government has ordered all of the island’s companies that sell to Chinese telecom equipment maker ZTE Corp to suspend shipments until they obtain approval, the Nikkei business daily reported on Friday.

The news comes the week after the United States banned American companies from selling components to ZTE for seven years, after the Chinese firm failed to comply with an agreement with the U.S. that was reached after it was caught illegally shipping goods to Iran.

Earlier on Friday, the CEO of Taiwan’s Media Tek Inc said on an earnings conference call that his company had suspended doing business with ZTE after receiving a notice from the government, the Nikkei said.

David Hsu, the deputy director-general and spokesman for Taiwan’s Bureau of Foreign Trade, confirmed the notice to the Nikkei, but told the daily the government did not actually bar Taiwanese firms from doing business with ZTE.

“What we do (asking suppliers to apply for an export permit) was for the companies’ own good, to ensure they are doing legal business with the Chinese firms,” the Nikkei quoted Hsu as saying.

Media Tek did not respond to Reuters’ request for comment outside regular business hours, while representatives for the economic division of Taiwan’s embassy in the United States did not immediately reply to a request for comment.