China's ZTE Halts Major Operations Following US Export Ban

Shanghai ZTE Corporation R&D Center

ZTE paid over $100 million each to Qualcomm Inc, Broadcom Inc, Intel Corp and Texas Instruments, the official said.

The announcement comes days after ZTE said it had asked the Commerce Department's Bureau of Industry and Security to suspend the ban and had submitted extra information to bolster its case.

The US Department of Commerce has against ZTE for alleged violations of the US Export Administration Regulations.

The denial order was initially imposed but automatically suspended in March past year on the condition that ZTE adhere to a settlement agreement which included penalizing the senior officials responsible for the decision to contravene the Iran sanctions.

The extent of the impact of the Commerce Department ban on USA suppliers was noted by the ZTE official, who was not authorised to speak publicly, as Chinese and U.S. government officials discuss a Washington visit next week by China's top economic official.

Last month, the Commerce Department barred American firms from exporting parts to the Chinese smartphone company for seven years, saying that ZTE had violated a previous settlement of criminal and civil charges for making illegal shipments to North Korea and Iran.

The suspension came amid worsening trade tensions between the US and China centered on technology-related intellectual property, though ZTE's case dates back to before President Donald Trump took office in January 2017.

And Chinese officials protested against the ban in discussions with a high-level USA delegation last week and said the United States side would discuss the matter with President Donald Trump.


The company, which is also the world's biggest telecommunications equipment manufacturer, would ditch Google's platform amid reports that it is under investigation by the U.S. for breaching sanctions against Iran, the South China Morning Post on Sunday.

The firm's products depended on American chips and other components and is unable to continue operating without key supplies.

American companies are estimated to provide 25 percent to 30 percent of the components used in ZTE's equipment, which includes smartphones and gear to build telecommunications networks, analysts noted.

ZTE also sells handsets to USA mobile carriers including AT&T, T-Mobile and Sprint.

None of the other companies could immediately be reached for comment.

The official said the recent ban was a grossly disproportionate penalty that ignored the strides ZTE had made towards complying with U.S. laws.

ZTE is one of the world's biggest telecommunications equipment makers.

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