ZTE ceases major operations as it tries to lift U.S. ban
“As of now, the Company maintains sufficient cash and strictly adheres to its commercial obligations subject to compliance with laws and regulations,” ZTE’s note reads. “The Company and related parties are actively communicating with the relevant U.S. government departments 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 the matters.”
According to a Bloomberg report Thursday, ZTE sees the next two weeks as crucial for its efforts to resolve the situation with the U.S. regulators. “The company is currently working hard to speedily resolve this impasse,” said an email allegedly sent to senior company staff.
To build its phones, ZTE needs parts from U.S. companies such as Qualcomm and Lumentum.
ZTE is a significant player in the mobile industry, and one of the few smartphone vendors from China that has made a significant impact in the U.S. In fact, the company launched the first Android Go phone in the U.S. in March, the $80 Tempo Go. ZTE’s site says the phone is currently out of stock.
Everything of ZTE went south in April, when the U.S. Department of Commerce denied export privileges to the company for selling equipment to Iran and North Korea. ZTE paid close to $2 billion in March 2017 to settle the matter, but it also promised to formally scold its executives and deny them bonuses due to participating in this mess. When the U.S. Department of Commerce learned that ZTE had never done that, they slapped the company with a seven-year denial of export privileges.
ZTE is not the only Chinese smartphone maker to land in trouble with the U.S. authorities. Although there is no formal ban in place, major U.S. mobile operators recently dropped plans to sell Huawei’s phones following warnings from the FBI, CIA, and NSA. The U.S. agencies deem that U.S. citizens should not buy phones from Huawei or ZTE, advising that doing so might opens doors for espionage.
Mashable has contacted ZTE with regards to the denial order and will update the article when we hear from them.