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10 May 2018, 03:01 | Megan Pierce
ZTE shuts down operations
There's more trouble for the Chinese telecommunication giant ZTE, as is in the process of ceasing all major operations in the US.
ZTE announced it has shut down operations and closed its online store following a USA ban against it.
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 company is the fourth largest smartphone vendor in the states with a 9.5% market share. However given the nature of ZTE's violations - shipping U.S. technology to Iran and North Korea, and then lying about employee reprimands - it will be a significant battle to get the export ban meaningfully altered. In a statement to Reuters, ZTE said it was actively communicating with the USA government "in order to facilitate the modification or reversal of the Denial Order by the us government and forge a positive outcome in the development of matters".
The ban "will also cause damages to all partners of ZTE including a large number of US companies", ZTE's public filing states. The full details of the request have not been disclosed, but the statement did say the company provided additional materials upon the request of the Commerce Department.
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Taiwanese semiconductor company Mediatek (2454.TW) said last week it had received a permit from the Taiwanese government to continue to supply ZTE. 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. The company paid a $1.2 billion fine in the case but failed to discipline employees involved and paid them bonuses instead.
We've reached out to ZTE for further comment on the matter.
According to Reuters, ZTE has ceased all major operations following the United States export ban it faces, following a failure to have the ban reversed or modified.
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