Chinese telecom company ZTE Corp is in talks with the U.S. Commerce Department to remove the trade sanctions leveled on the company last week, according to inside sources.

A senior official in the U.S. Department of Commerce has confirmed to Reuters that discussions are ongoing with ZTE. The official stated that discussions have been constructive and result oriented.

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A ZTE spokesman also confirmed that the company is holding talks with the U.S. Commerce Department, but refused to divulge any information about the details of the talks.      

On March 7, the U.S. Commerce Department imposed tough trade sanctions on the Chinese company after ZTE violated its export restrictions to Iran. The restrictions put ZTE Corp on the U.S. list of blacklisted companies, barring the company from procuring many goods from U.S. companies, including computers, software and telecommunications equipments.

The sanctions are likely to threaten ZTE's global supply chain and create severe shortage of spare parts for the company in the long run.          

"It's (sanctions) going to have a big impact on the company, that's for sure," said a source familiar with the matter.

China has criticized the U.S. sanctions against ZTE. In a television broadcast, China's Commerce Minister Gao Hucheng said, "The Chinese side attaches great attention and strong dissatisfaction over this."

Gao said China hopes ZTE will be soon removed from the blacklist entities "in order to avoid harming the stable, healthy development of China-U.S. economic and trade relations."           

Last week's sanctions is a result of 2012 investigation    

Last week's sanctions imposed on ZTE Corp is a fall out of an investigation by the U.S. Commerce Department launched in 2012. The investigation was launched following a Reuters report claiming that the company was exporting hardware and software products from well known U.S. tech companies to Iran.

Reuters reported that ZTE Corp exported powerful surveillance systems to Iran.              

Iran's controversial nuclear program

America's long-time ban on the sale and export of U.S. made tech products to Iran was mainly in response to Tehran's controversial nuclear programme. The U.S. feared that Tehran may use U.S. made tech products to develop its military and nuclear technology.     

The U.S. claims that Iran's nuclear programme poses a threat to world peace. However, Tehran has refuted these allegations, claiming that its nuclear programme is only civilian purpose - mainly for generating electricity.  

In 2015, the U.S. and Iran reached a nuclear agreement after Tehran agreed to dismantle its nuclear programme. But distrust between the two nations still lingers.  

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