The business decision follows last month's legal issue impacting ZTE's ability to purchase components from U.S. companies.
The U.S. action, first reported by Reuters, could be devastating to ZTE. Now, it's been revealed that the company is ceasing major operations. "As of now, the company maintains sufficient cash and strictly adheres to its commercial obligations subject in compliance with laws and regulations".
It was communicating with all the US federal government "in order to facilitate the adjustment or alteration of the Denial get from the USA government and invent a favorable impact within the maturation of issues".
Last year, the company admitted to selling American technology to Iran and North Korea in violation of the United States embargo on the former. ZTE, the fourth-largest smartphone vendor in the USA, does business with more than 160 countries and employs 75,000 people; the Times calls it the "biggest electronics maker you've never heard of".
Last month, the US government reactivated the ban after it said ZTE violated terms of the settlement and made repeated false statements, which ZTE disputed. The penalties prescribed by the U.S. Commerce Department included withholding bonus checks and issuing letters of reprimand to those involved.
The Department of Commerce determined ZTE made false statements to the Bureau of Industry and Security specifically in 2016 and 2017. For now, ZTE's manufacturing is halted, leaving employees to attend every-other-day training sessions and hang out in company dorms. It blamed a decision from the Commerce Department banning USA businesses from selling to the Chinese firm, after it pleaded guilty to conspiring to sell technology to Iran in violation of US sanctions.