China-based telecom company ZTE Corp. has halted “major operating activities” in the wake of a U.S. denial order, the China-based telecom announced Wednesday via this filing with the Hong Kong stock exchange.
Last month, ZTE held that a move by the U.S. Commerce Department to deny export privileges was unfair and stood to “severely impact” the company’s survival.
On April 18, the U.S. Commerce Department said ZTE had violated the terms of its settlement agreement with the U.S. over illegally shipping telecom equipment to Iran and North Korea and will be blocked from exporting its telecom equipment as a penalty, and, as a result, had denied export privileges to ZTE.
ZTE said soon after that it had been working on an export control compliance program, adding that the order arrived before a proper investigation could be completed.
“As of now, the Company maintains sufficient cash and strictly adheres to its commercial obligations subject to compliance with laws and regulations,” ZTE said today. “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.”
ZTE has also held that the ban “will also cause damages to all partners of ZTE including a large number of U.S. companies.” Per CNN, that includes Qualcomm and Corning.