Documents reveal plan by China's ZTE to sell US computers to Iran
By Steve Stecklow, Reuters
April 12, 2012, 12:26 am TWN
Reuters--China's ZTE Corp., which recently sold Iran's largest telecommunications firm a powerful surveillance system, later agreed to ship to Iran millions of dollars worth of embargoed U.S. computer equipment, documents show.
The American components were part of an 8-million-euro (US$10.5 million) equipment-supply contract, dated June 30, 2011, between ZTE, a Chinese trading firm, and a unit of the consortium that controls the Iranian telecom, Telecommunication Co. of Iran (TCI), according to documents reviewed by Reuters. ZTE is China's second-largest telecommunications equipment maker.
The documents shed further light on how Iran obtains sophisticated American tech products despite U.S. sanctions on Iran. China is a major conduit. Reuters in March revealed an earlier deal between ZTE and TCI, which centered on non-American surveillance equipment but also included some U.S. tech goods. The latest deal, though smaller in scale, was much more reliant on U.S. products.
Beijing and Moscow have vetoed Western attempts to strengthen sanctions against Iran over its nuclear-development program. ZTE, based in the city of Shenzhen, is publicly traded but its largest shareholder is a Chinese state-owned enterprise. According to the contract's parts list, the equipment to be delivered from China included IBM servers; switches made by Cisco Systems Inc. and Brocade Communications Systems Inc.; database software from Oracle Corp. and a unit of EMC Corp.; Symantec back-up and anti-virus software; and a Juniper Networks firewall. The parts were intended for business-support services, including a ZTE billing system.
A spokesman for ZTE said last week in an email that "as far as we know" the company had not yet shipped any of the products. Asked if ZTE intended to do so, he emailed a new statement Monday that said: "We have no intention to implement this contract or ship the products."
He also said ZTE decided "to abandon" the agreement after "we realized that the contract involved some U.S. embargoed products."
The contract had made clear the American provenance of the goods: Its accompanying parts list, signed by ZTE, lists more than 20 different computer products from U.S. companies. Washington has banned the sale of such goods to Iran for years.
U.S. companies that responded to requests for comment said they were not aware of the Iranian contract; several said they were investigating the matter.
A spokesman for IBM said: "Our agreements with ZTE specifically prohibit ZTE from the transfer of IBM products to Iran. If any of IBM's business partners are breaching our export compliance agreements, then IBM will take appropriate actions."
A Brocade spokesman said the company doesn't sell any products to Iran "and we certainly have not shipped these products to" ZTE. A spokesman for Greenplum, the EMC unit, said: "We have no knowledge of the contract described, but are actively researching this matter." A Cisco spokesman said: "We continue to investigate this matter, as any violation of U.S. export controls is a very serious matter."