ZTE shuts down business operations thanks to U.S. export ban

ZTE shuts down business operations thanks to U.S. export ban
The U.S. Commerce Department export ban that prevents ZTE from procuring U.S. software, hardware and components has hit ZTE hard, according to a new report published today. 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. As of now, the company maintains sufficient cash and strictly adheres to its commercial obligations subject to compliance with laws and regulations." The company is the fourth largest smartphone vendor in the states with a 9.5% market share.

ZTE got to this place by selling goods and services to Iran and North Korea, which violated U.S. sanctions. The penalties prescribed by the U.S. Commerce Department included withholding bonus checks and issuing letters of reprimand to those involved. A seven-year ban on U.S. exports was stayed until U.S. officials determined that ZTE had been lying to them about its compliance with the penalties. The seven year U.S. export ban was reinstated last month and runs to March 2025.

While ZTE is trying to get the U.S. Commerce Department to reverse the ban, the company has had to shutdown its on-line website as well as pull its listings from on-line retailers in China such as Alibaba Group’s Taobao platform. Instead of offering ZTE phones, the sites say that the page is being updated. The company has apparently lost access to the part of its supply chain based in the U.S., which includes Qualcomm's Snapdragon chips, and the license that allows it to install the Google Play Services version of the open source Android operating system.

The U.S. said recently that it is also investigating Chinese smartphone manufacturer Huawei for violating U.S. sanctions against Iran. Huawei, the third largest smartphone manufacturer in the world, has some advantages over ZTE. First, it designs and uses its own Kirin chipsets, and it has been developing its own OS just in case. Back in 2012, both Huawei and ZTE were accused by U.S. lawmakers of espionage, a charge that both companies continue to deny today. Both ZTE and Huawei are banned from selling their devices on U.S. military bases.

source: Reuters

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54 Comments

1. cmdacos

Posts: 3889; Member since: Nov 01, 2016

Well the apple lobbying paid off! Protectionism in the name of fear mongering works wonders lol

4. bucky

Posts: 3774; Member since: Sep 30, 2009

nice try. they disobeyed sanctions and deserve the problems that come with it. Nothing to do with apple...

15. TheOracle1

Posts: 2074; Member since: May 04, 2015

I agree with you but the ultimate loser will be US businesses and consumers if this becomes a tit for tat trade war. China can harm US businesses (especially agriculture) and jobs in such a way that voters won't be able to tolerate. The Chinese don't have to worry about such things and can outlast any US administration.

17. kiko007

Posts: 7491; Member since: Feb 17, 2016

Harming the U.S. might be a good thing imo. Maybe they’ll learn a lesson about blowhard demagogues almost always being bad for the nation they lead. However, having spent a good chunk of my life seeing rural Americans making stupid decisions, I can’t say I expect much.

35. electrophage

Posts: 73; Member since: Jun 17, 2011

Amen brother!

36. electrophage

Posts: 73; Member since: Jun 17, 2011

Amen brother

37. rouyal

Posts: 1567; Member since: Jan 05, 2018

You should read your comment carefully to see why the leftist platform is dying. You continue on showing your true bigoted colors like the rest of the left, and continue shaking your head in disbelief when people vote against your ilk.

47. Dr.Phil

Posts: 2299; Member since: Feb 14, 2011

Actually, the export ban came as a result of an agreement that ZTE would punish the employees that acted illegally against the Iranian and North Korean sanctions but they chose not to. In other words, this export ban is not a DIRECT result of them violating sanctions, but rather an INDIRECT result from them agreeing to terms that the US laid out saying if they didn't punish the employees they would face a 7 year export ban. Consider it like ZTE violated the terms of a settlement.

5. Sammy_DEVIL737

Posts: 1526; Member since: Nov 28, 2016

Well you can’t live without mentioning “Apple” in your everyother comment.

7. Subie

Posts: 2301; Member since: Aug 01, 2015

If that was true, wouldn't they have done the same with Samsung years ago... This export ban on ZTE will do little or nothing to bolster iPhone sales IMO.

8. midan

Posts: 2585; Member since: Oct 09, 2017

Where this Apple obsession comes? Why so bitter?

16. kiko007

Posts: 7491; Member since: Feb 17, 2016

Dude, ZTE did something illegal and are paying the price for said action. Give the conspiracy nonsense a rest.

38. rouyal

Posts: 1567; Member since: Jan 05, 2018

First you say that hopefully China hits the US hard, now you are siding with the decision. I guess you noticed your libtarded comment didn’t get upvotes so you made this one? Worry about your pajama boy PM up there, and let the alpha males run things down here.

40. kiko007

Posts: 7491; Member since: Feb 17, 2016

What the f**k are you talking about? You understand that I can reprimand ZTE while still believing certain aspects of the United States is assbackwards... right? Also the comment you’re replying to came BEFORE (check the number lol) 17.

2. libra89

Posts: 2259; Member since: Apr 15, 2016

Wow that's crazy.

3. Papa_Ji

Posts: 801; Member since: Jun 27, 2016

I just want China should also ban Apple.

6. midan

Posts: 2585; Member since: Oct 09, 2017

That would mean horrible news for chinese workers, also i don't think there's any reason why they could do that.

10. RebelwithoutaClue unregistered

Why? Has Apple delivered parts or devices to countries that have been banned by China?

12. Crispin_Gatieza

Posts: 3098; Member since: Jan 23, 2014

Retaliation requires nothing but willpower on the part of the retaliator. China doesn't need a reason other than to tell Lord Cheetoh to f**k himself and what better company to do it against than Apple?

14. kiko007

Posts: 7491; Member since: Feb 17, 2016

They’d literally only be hurting themselves by doing so, though. I’d imagine China’s government is smart enough to know that, unlike the orange monkey.

24. Crispin_Gatieza

Posts: 3098; Member since: Jan 23, 2014

Apple isn't top dog in China so it wouldn't hurt as much as in Western countries. They are well behind Huawei, Oppo, Vivo and Xiaomi among others. You and I may know this but I doubt Emperor Fullofs**ticus has a clue.

13. mootu

Posts: 1421; Member since: Mar 16, 2017

If you think China won't retaliate in some form then you are dreaming.

22. RebelwithoutaClue unregistered

So a Chinese company does something illegal (in the eyes of USA) and USA takes steps (which they do to every company that does a similar thing) and China should retaliate on behalf of a company risking even worse steps taken by USA. They are too depended on each other to make such childish decisions.

45. mootu

Posts: 1421; Member since: Mar 16, 2017

"China should retaliate on behalf of a company risking even worse steps taken by USA. They are too depended on each other to make such childish decisions." China won't go after Apple (yet) but watch what happens with with Qualcomm's $44 billion takeover of NXP. China are the only ones who havn't signed off on the deal and have blocked it for the next 90 days (making QC refile). They are waiting to see what happens with ZTE. If ZTE continue to be penalised China will scupper QC's NXP deal (which QC really needs) costing QC $2 billion in penalties.

26. Papa_Ji

Posts: 801; Member since: Jun 27, 2016

How much is that Number??? 2000-3000.... These can be easily arranged in local companies.

11. Humanoid

Posts: 1226; Member since: Dec 11, 2017

Local brands will no longer have their inspiration.

9. Crispin_Gatieza

Posts: 3098; Member since: Jan 23, 2014

This is only the beginning. Cell phones are a small part of the overall global economy so this will be a small blip on the screen. With Cheetoh's trade war raging you will see bigger implications with the steel tariffs. I've already received price hikes on materials this week alone that amount to 18% increases. Of course, I'll just adjust my numbers and pass on the increases to my customers as everybody in my industry is already doing. It's gonna get ugly folks, cinch those seat belts real tight.

27. drazwy

Posts: 347; Member since: Jan 15, 2014

yawn.

39. rouyal

Posts: 1567; Member since: Jan 05, 2018

I wonder if you leftist beta males even realize how cringe worthy you sound?

42. TheOracle1

Posts: 2074; Member since: May 04, 2015

What the hell does this have to do with partisanship? It was the Obama administration that sanctioned them initially. You're making a fool of yourself.

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