Chinese telecommunications giant ZTE is ceasing all "major operating activities" after being hit by sanctions from USA regulators.
Last month, the BIS banned American companies from selling telecommunications equipment and services to ZTE after the firm allegedly did not live up to the terms of an agreement that had been worked out after it illegally shipped telecom equipment to Iran and North Korea.
As of now, all major operating activities have been shut down while ZTE tries to negotiate a modification or even reversal of the Denial Order.
ZTE said it maintains sufficient cash and will strictly adhere to its commercial obligations.
It said it is 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".More news: More walkouts over new ownership of Cambodian newspaper Phnom Penh Post
The ban that threatens to cut off ZTE's supply chain came amid heightened tension over a possible U.S. This move comes in the aftermath of a USA ban placed on the company. While the company didn't go into too much detail, ZTE says further announcements on its status - in relation to the recent events - will be made in the near future.
In addition to this ban, the company faces several other issues related to USA trade.
As a effect of such heavy restrictions, the company today announced to Hong Kong stock market traders that it will be shutting down the majority of its operations. Back in March, the company was fined about $900 million after admitting of selling products with United States tech to restricted countries such as Iran.
The U.S. action, first reported by Reuters, could be devastating to ZTE. The penalties prescribed by the U.S. Commerce Department included withholding bonus checks and issuing letters of reprimand to those involved. The company's false statements were reported to the US government after the Bureau of Industry and Security requested documentation showing proof that employee discipline had occurred.