Published: Thu, May 10, 2018
Markets | By Noel Gibbs

ZTE shuts down operations due to USA ban

ZTE shuts down operations due to USA ban

The business decision follows last month's legal issue impacting ZTE's ability to purchase components from USA companies.

ZTE announced it has shut down operations and closed its online store following a USA ban against it. The company agreed to pay out a fine for those actions and said that it would discipline the company officials behind the plan to violate the US laws.

The company announced the move in a securities filing on Wednesday. The Chinese smartphone and telecom equipment manufacturer wrote today in a filing to the Hong Kong Stock Exchange that "As a result of the Denial Order, the major operating activities of the company have ceased".

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ZTE also told Reuters that it's been in touch with the U.S. Government "in order to facilitate the modification or reversal of the Denial Order by the U.S. Government and forge a positive outcome in the development of matters". While the company didn't go into too much detail, ZTE says further announcements on its status - in relation to the recent events - will be made in the near future.

ZTE settled the sanction case with the USA government last March after admitting to illegally shipping products with US technology to countries including Iran and paying a record fine of almost $900 million. In a statement released amidthe events, ZTE's Chief Export Compliance Officer - U.S. -based lawyer Matt Bell - expressed the company would restructure its legal department as well as institute new policies, training, and automated tools to keep up with regulations. The penalties prescribed by the U.S. Commerce Department included withholding bonus checks and issuing letters of reprimand to those involved.

Later that month, Taiwan's government ordered local companies to halt their business with ZTE prior to receiving approval.

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Updated on May 9: ZTE says it has ceased main business operations due to USA ban.

ZTE said on Sunday it had submitted a request to the U.S. Commerce Department for the suspension of the ban.

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