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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53 Comments

54. razmahtaz001

Posts: 501; Member since: May 11, 2013

so basically...the u.s. dictates worldwide sancations, and because of that. it affects companies of other countries...im from the u.s., but it seems like our country is the new "old soviet union" LOL

53. USuck

Posts: 76; Member since: Apr 07, 2018

Finally, USA is doing the right thing.

41. Harjyke

Posts: 10; Member since: May 08, 2018

Please, what's the effect it would have on ZTE smartphone users now?

30. wesley.

Posts: 218; Member since: Aug 06, 2013

So a Chinese company should enforce an American sanction to not trade in certain countries? Makes perfect sense... Where's the ZTE Axon 8, dammit.

34. drazwy

Posts: 377; Member since: Jan 15, 2014

That's kinda how this all works. "We will let you use this software as long as you don't share it with countries we don't share with." It's called export control and it's fairly important especially when dealing with a country like China, who has a fairly robust history of reverse engineering intellectual property and claiming/reselling it as their own.

29. xchatter

Posts: 44; Member since: Mar 25, 2013

Too bad. :/ ZTE makes good products. USA once again "helping" the world.

18. LikeMyself

Posts: 631; Member since: Sep 23, 2013

So people in Iran can't have access to standard technology used by all people living in the world? US makes nuclear weapons & so does Iran, but US self-proclaims itself responsible enough to own one & Iran not. North Korea is on a whole other level though. American logic at its best. This is a human rights infringement blocking people's access to information

19. kiko007

Posts: 7525; Member since: Feb 17, 2016

Give the feigned outrage a break. Like it or not, America makes the rules regarding WHO can sell WHAT within their borders. If they say “you can’t sell things in country X and still operate in our country” companies shouldn’t sell crap to country X. Besides, who in their right mind would risk the most profitable market for consumer electronics, for Iran? That’s just awful decision making on ZTE’s behalf.

9. Crispin_Gatieza

Posts: 3197; 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: 377; Member since: Jan 15, 2014

yawn.

39. rouyal

Posts: 1603; Member since: Jan 05, 2018

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

42. TheOracle1

Posts: 2340; 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.

48. Crispin_Gatieza

Posts: 3197; Member since: Jan 23, 2014

He thinks calling educated, well-spoken people "libtards" (his favorite) and other such stupidities is some form of insult. Typical behavior for Trump supporters so it's no big deal. Hey, I'd be pretty salty if I had to go through life at a menial minimum-wage job, married to an ugly, one-toothed heifer and getting my jollies on a tech site by spewing diarrhea of the brain. In other words, he's a jealous snowflake.

50. rouyal

Posts: 1603; Member since: Jan 05, 2018

Educated? Well spoken? Not sure I seen much of that from your post, aside from you not knowing how to spell ‘Cheeto’. Is that what women call you? You know that’s a nice way they call you a friend zone Beta, right? You spoke of your price hike on materials...I didn’t think weed trimmer line, 2 stroke oil, and a couple gallons of gas for the mower would set you back that much. Just smoke one less pack of Newport’s a week, or fewer blunt wraps and you’ll be ok. Don’t try to jack the fee this week when you come to cut my yard, or I’ll send you packing.

52. TheOracle1

Posts: 2340; Member since: May 04, 2015

You still haven't explained what this has to do with partisanship. It's clear you're unable to address the issue in any coherent way without resorting to irrelevant partisan insults.

51. rouyal

Posts: 1603; Member since: Jan 05, 2018

Or is the price of materials for craft supplies for stuff you sell on Etsy?

3. Papa_Ji

Posts: 925; Member since: Jun 27, 2016

I just want China should also ban Apple.

6. midan

Posts: 3261; 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: 3197; 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: 7525; 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: 3197; 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: 1541; 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: 1541; 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: 925; 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.

2. libra89

Posts: 2349; Member since: Apr 15, 2016

Wow that's crazy.

1. cmdacos

Posts: 4412; Member since: Nov 01, 2016

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

4. bucky

Posts: 3797; Member since: Sep 30, 2009

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

* Some comments have been hidden, because they don't meet the discussions rules.

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