Chinese phone maker ZTE halts major operations after USA imposes supply ban

ZTE's booth during Mobile World Congress in Barcelona

ZTE's booth during Mobile World Congress in Barcelona Spain

As a result, the US issued its denial order, forbidding ZTE from buying chips from companies such as Intel (intc) and Qualcomm (qcom), and optical components from Lumentum.

ZTE is one of China's largest tech companies, and yet, it's ceased all "major operating activities", according to a new public filing.

ZTE got hit with a fine of nearly $900 million a year ago for evading the embargo on telecom equipment exports to Iran, by using USA components in devices that it sold there. For now, the company has enough money to maintain "its commercial obligations subject to compliance with laws and regulations".

The company says that it's working with the United States government to get the ban reversed, but there's no progress on that front so far.

"As a result of the denial order, the major operating activities of the company have ceased", ZTE said in a filing to the exchange. Like ZTE before it, Huawei is reportedly under investigation in the US for violating sanctions against Iran. The Chinese smartphone manufacturer has been hit hard by the U.S. Department of Commerce (Doc), which banned American companies from selling components to ZTE last month.

A USA delegation traveled to Beijing last week to discuss the brewing trade conflict with their Chinese counterparts.

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The ban came amid tension between the United States and China's trade war.

Part of the agreement included letting go of four of its senior employees and disciplining 35 others by reducing their bonuses or reprimanding them, Reuters notes.But according to the Department of Commerce, ZTE rewarded its employees for illegal conduct instead.

Last month, the Department of Commerce officially instated the ban, alleging that ZTE had violated the terms of the sanction case.

China's second-biggest telecom equipment company, ZTE, announced that it will immediately close down its main domestic and global operations. Unlike many online publications, we don't have a paywall or run banner advertising, because we want to keep our journalism open, without influence or the need to chase traffic.

"We are hopeful that ZTE will be able to reach a resolution to this matter soon so that we can recommence selling Telstra-branded ZTE devices", the Telstra executive wrote. A ZTE employee also mentioned that employees are reporting to work as usual, but "with not much to do".

Employees at ZTE's headquarters in the southern Chinese technology hub of Shenzhen were cagey about speaking to reporters after the ban was announced, but some voiced concerns.

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