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ZTE Shuts Down Main Business Operations After US Ban (techcrunch.com)

Posted by BeauHD on from the cease-and-desist dept.

An anonymous reader quotes a report from TechCrunch: ZTE wasn't kidding around when it suggested that a U.S. Department of Commerce order would "severely impact" its survival. It's hard to image a successful path around the seven-year ban on the sale of U.S. products to the company imposed after it reportedly failed to sufficiently reprimand staff for flouting Iranian sanctions. Earlier today, in fact, the Chinese smartphone/telecom manufacturer announced that it had ceased its main business operations as it attempts to figure out the best way forward. "As a result of the Denial Order, the major operating activities of the company have ceased," the company wrote in an exchange filing spotted by Reuters. "As of now, the company maintains sufficient cash and strictly adheres to its commercial obligations subject in compliance with laws and regulations."

2 of 134 comments (clear)

  1. What? by JBMcB · · Score: 3, Interesting

    ZTE looks like a huge company with operations all over the world. According to Wikipedia, cell phones only account for roughly 29% of their operations. So being shut out of one market (albeit a major one) in one sector of their business is enough to knock out the entire company? Something doesn't smell right.

    --
    My Other Computer Is A Data General Nova III.
  2. You usually can't stop them by drnb · · Score: 3, Interesting

    The fact that any company sold anything to Iran at all under sanctions was basically a "let's see you stop me" move, and they got rightly called on that.

    True they didn't have the sophistication to create a cutout company. A Czech company created a non-EU cutout company to sell goods to, who would in turn sell goods to Iran. Different ownership, a friend of a friend owned the cutout. The Czech company got its extra sales at a good price, the cutout got a good markup and basically reshipped unopened boxes. The Iranian buyers paid noticeably more for the goods but it understood the complications and workaround.

    Now this was possible since the goods were consumer luxury items. Not tightly controlled and tracked military grade type stuff. YMMV depending on the goods.