ZTE shuts down major operations due to US ban

Photo: OMGUbuntu

ZTE is ending all its "major operating activities" in the wake of a US ban that restricted all US firms to supply China's giant with any item tech related.

The Chinese behemoth, which was found guilty of violating US export restrictions have temporarily shut down its major operating activities while it tries to negotiate a modification or even reversal of the Denial Order. A request for suspension of the ban has been submitted last Sunday.

The trade war currently going on between the US and China means several companies are bound to suffer, and with ZTE's supply chain being one, the company had to act accordingly. Currently, you cannot buy anything or make any orders on its official website and  buying from Alibaba's Group e-commerce Taobao is a no-go as well.


In case you missed out on the whole story, here is a summary...

ZTE, last year, pleaded guilty to conspiring to violate US sanctions by illegally shipping US-made goods and technology to Iran. The company then issued a settlement, part of which is a promise to fire four senior employees and discipline 35 others by either reducing their bonuses or reprimanding them.

While the company has fired those four senior employees, it has admitted last month that it had not disciplined or reduced bonuses for the other 35 which forced the US Department of Commerce to impose the ban. The ban places a seven years restriction on all US firms from supplying any tech to ZTE.

According to reports, ZTE depends on chipsets from Qualcomm and other gears from several American companies, as it constitutes about 25% - 30% of its smartphones. Not receiving supplies for the next seven years will most certainly affect its business negatively, which we are starting to see.

Back in March, the company was also fined about $900 million after admitting of selling products with US tech to restricted countries such as Iran.

Source, Via