Chinese company ZTE stops business operations after US ban

Chinese company ZTE stops business operations after US ban
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Chinese telecommunications giant ZTE is ceasing all "major operating activities" after being hit by sanctions from U.S. regulators.

The company announced the move in a securities filing on Wednesday. It blamed a decision from the Commerce Department banning U.S. businesses from selling to the Chinese firm, after it pleaded guilty to conspiring to sell technology to Iran in violation of U.S. sanctions.

“As a result of the Denial Order, the major operating activities of the Company have ceased,” ZTE said in the filing.

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“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 and Huawei, another Chinese telecommunications firm, have been the subject of scrutiny from regulators worried that their ties to the Chinese government constitute a national security threat. In a 2012 report, Congress warned that the companies’ technology could be used to conduct espionage on Americans.

Reuters reported that work had slowed for ZTE employees since Commerce cut the firm off from its U.S. suppliers.