Less than one month after the U.S. Department of Commerce announced that it was banning U.S. companies from selling components to ZTE, the ban is having a major effect on ZTE.
ZTE has said that it’s ceased its main business operations as a result of the U.S. government ban. “As a result of the Denial order, the major operating activities of the company have ceased,” ZTE explained. “As of now, the company maintains sufficient cash and strictly adheres to its commercial obligations subject to compliance with laws and regulations.”
ZTE is working with the U.S. government to have the ban reversed or modified, saying that it has submitted a request to the U.S. Department of Commerce for the ban to be suspended.
The ban was put in place by the U.S. government after ZTE violated a settlement it had made after illegally shipping U.S. tech to Iran. ZTE was supposed to pay $890 million in fines, fire four senior employees, and discipline 35 other employees by reducing their bonuses, but the company later admitted that it did not discipline those employees.
Now ZTE is suffering as a result of the ban, having ceased its main business operations. It’s unclear how long ZTE can continue on like this, but the company likely wants to get this ban reversed as quickly as possible so it can get back to business as usual.