ZTE Corp's main business operations have ceased due to a ban imposed by the USA government, but the Chinese firm is trying to have the ban modified or reversed, it said in exchange filings late on Wednesday.
ZTE said in its filing it maintains "sufficient cash" and is "actively communicating" with the United States for a modification or reversal of the order, issued by the USA commerce department over violations of a previous settlement regarding illegal sales of ZTE phones and equipment to Iran.
ZTE was accused of dodging United States sanctions on Iran in 2016, by selling technology from the U.S.to Iran through multiple shell companies. And ZTE's larger telecom gear-making operation probably ran afoul of the same component shortages, said Huang Leping, an analyst with CICC. US officials have said the decision of the BIS to impose the ban against ZTE was not related to trade policy, according to Chinese press reports.
ZTE was accused of violating U.S. sanctions on North Korea and Iran, as well as lying to USA officials.
In a bid to get the ban removed, the company has submitted an application to the U.S. Commerce Department's Bureau of Industry and Security (BIS) requesting it be suspended. Earlier this week, it was announced that Huawei and ZTE phones had been banned from military stores.
ZTE said in an internal memo to employees last week that after learning of the USA order on April 16, as a global company growing up in China, it has been acting in line with the government of China, and is taking steps under its guidance to facilitate the resolution of the issue, the South China Morning Post reported last Saturday.
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ZTE was accused by the U.S. Department of Commerce of illegally shipping U.S. equipment to Iran and North Korea.
ZTE said in an exchange filing it "maintains sufficient cash" for now and will meet its commercial obligations.
The ban, which effectively cuts off much of ZTE's supply chain, came amid heightened tension over a possible US-China trade war.
China's Ministry of Commerce said in a statement last Friday that Chinese officials had made "solemn representations" over the ZTE case to the U.S. delegation.
We'll keep you updated on ZTE, but things sure do look bad at the moment.
"We fully understand high-tech factories' characteristic of fast-paced shipments of goods, we won't create obstacles for the pace of their exports", a trade official told Reuters on Monday. The employee, who declined to be named, said business trips had been halted.