A major Iranian partner of Huawei Technologies offered to sell at least
1.3 million euros worth of embargoed Hewlett-Packard computer equipment
to Iran's largest mobile-phone operator in late 2010, documents show.
Huawei, the world's second largest telecommunications equipment maker,
says neither it nor its partner, a private company registered in Hong
Kong, ultimately provided the HP products to the telecom, Mobile
Telecommunication Co of Iran, known as MCI. Nevertheless, the incident
provides new evidence of how Chinese companies have been willing to help
Iran evade trade sanctions.
The proposed deal also raises new
questions about Shenzhen-based Huawei, which recently was criticized by
the U.S. House Intelligence Committee for failing to "provide evidence
to support its claims that it complies with all international sanctions
or U.S. export laws."
At least 13 pages of the proposal to MCI,
which involved expanding its subscriber billing system, were marked
"Huawei confidential" and carried the company's logo, according to
documents seen by Reuters. In a statement to Reuters, Huawei called it a
"bidding document" and said one of its "major local partners," Skycom
Tech Co Ltd, had submitted it to MCI.
The statement went on to
say, "Huawei's business in Iran is in full compliance with all
applicable laws and regulations including those of the U.N., U.S. and
E.U. This commitment has been carried out and followed strictly by our
company. Further, we also require our partners to follow the same
commitment and strictly abide by the relevant laws and regulations."
October, Reuters reported that another Iranian partner of Huawei last
year tried to sell embargoed American antenna equipment to Iran's second
largest mobile operator, MTN Irancell, in a deal the buyer ultimately
rejected. The U.S. antenna manufacturer, CommScope Inc, has an agreement
with Huawei in which the Chinese firm can use its products in Huawei
systems, according to a CommScope spokesman. He added that his company
strives to comply fully with all U.S. laws and sanctions.
has a similar partnership with HP. In a statement, the Palo Alto,
Calif., company said, "HP has an extensive control system in place to
ensure our partners and resellers comply with all legal and regulatory
requirements involving system security, global trade and customer
privacy and the company's relationship with Huawei is no different."
statement added, "HP's distribution contract terms prohibit the sale of
HP products into Iran and require compliance with U.S. and other
applicable export laws."
Washington has banned the export of
computer equipment to Iran for years. The sanctions are designed to
deter Iran from developing nuclear weapons; Iran says its nuclear
program is aimed purely at producing domestic energy.
Huawei and its Iranian partner, Skycom, appear to have very close ties.
Iranian job recruitment site called Irantalent.com describes Skycom as
"a leading telecom solution provider" and goes on to list details that
are identical to the way Huawei describes itself on its U.S. website:
employee-owned, selling "solutions" used by "45 of the world's top 50
telecom operators" and serving "one-third of the world's population."
LinkedIn.com, several telecom workers list having worked at
"Huawei-skycom" on their resumes. A former Skycom employee said the two
companies shared the same headquarters in China. And an Iranian telecom
manager who has visited Skycom's office in Tehran said, "Everybody
carries Huawei badges."
A Hong Kong accountant whose firm is
listed in Skycom registration records as its corporate secretary said
Friday he would check with the company to see if anyone would answer
questions. Reuters did not hear back.
The proposal to MCI, dated
October 2010, would have doubled the capacity of MCI's billing system
for prepaid customers. The proposal noted that MCI was "growing fast"
and that its current system, provided by Huawei, had "exceeded the
system capacity" to handle 20 million prepaid subscribers.
order to keep serving (MCI) with high quality, we provide this expansion
proposal to support 40M subscribers," the proposal states on a page
marked "HUAWEI Confidential."
The proposal makes clear that HP
computer servers were an integral part of the "Hardware Installation
Design" of the expansion project. Tables listing equipment for MCI
facilities at a new site in Tehran and in the city of Shiraz repeatedly
reference HP servers under the heading, "Minicomputer Model."
documents seen by Reuters also include a portion of an equipment price
list that carries Huawei's logo and are stamped "SKYCOM IRAN OFFICE."
The pages list prices for HP servers, disk arrays and switches,
including those that already are "existing" and others that need to be
added. The total proposed project price came to 19.9 million euros,
including a "one time special discount."
The proposed new HP
equipment, which totaled 1.3 million euros, included one server, 20 disk
arrays, 22 switches and software. The existing HP equipment included 22
servers, 8 disk arrays and 13 switches, with accompanying prices.
who had provided the existing HP equipment to MCI, Vic Guyang, a Huawei
spokesman, said it wasn't Huawei. "We would like to add that the
existing hardware equipment belongs to the customer. Huawei does not
have information on, or the authority to check the source of the
Officials with MCI did not respond to requests for comment.
a series of stories this year, Reuters has documented how China has
become a backdoor for Iran to obtain embargoed U.S. computer equipment.
In March and April, Reuters reported that China's ZTE Corp, a Huawei
competitor, had sold or agreed to sell millions of dollars worth of U.S.
computer gear, including HP equipment, to Telecommunication Co of Iran,
the country's largest telecommunications firm, and a unit of the
consortium that controls TCI.
The articles sparked investigations
by the U.S. Commerce Department, the Justice Department and some of the
U.S. tech companies. ZTE says it is cooperating with the federal probes.
TCI is the parent company of MCI.
© Thomson Reuters 2012