China's ZTE Corporation has ceased major operations, citing United States ban

China's ZTE Corporation has ceased major operations, citing United States ban

China's ZTE Corporation has ceased major operations, citing United States ban

ZTE sent an internal memo to its employees stating that the firm has been "proactively communicating with relevant departments of the U.S government", according to the South China Morning Post.

The ban that threatens to cut off ZTE's supply chain came amid heightened tension over a possible U.S.

Last year, the company admitted to selling American technology to Iran and North Korea in violation of the United States embargo on the former.

ZTE last month was hit with a ban from Washington forbidding US companies to supply it with components and technology after it was found to have violated USA export restrictions.

A Chinese tech firm has shut down most of its company after the Trump administration took steps to distance the US from its products.

As one of the world's largest telecom equipment makers alongside Huawei [HWT.UL], Ericsson (ERICb.ST) and Nokia (NOKIA.HE), ZTE relies on USA companies such as Qualcomm (QCOM.O) and Intel (INTC.O) for up to a third of its components.

In addition to the fine, the company was subject to a seven-year, $300 million suspended penalty if the company violated the settlement.

USA authorities imposed the penalty after discovering that Shenzhen-based ZTE had misled regulators involving the illegal shipments to the DPRK and Iran. In a statement released amidthe events, ZTE's Chief Export Compliance Officer - U.S. -based lawyer Matt Bell - expressed the company would restructure its legal department as well as institute new policies, training, and automated tools to keep up with regulations. Instead of suffering the consequences of their actions, the employees had in fact received full bonuses. There's nothing inherently wrong with using MediaTek SoCs, but it will very likely take away ZTEs competitive edge in the smartphone market.

The company did not immediately respond to a request for more information.

Last month, the USA government reactivated the ban after it said ZTE violated terms of the settlement and made repeated false statements, which ZTE disputed.

ZTE said it's trying to negotiate with the US government to get the recent bans overturned.

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