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Saturday, 26 May 2012 - Exclusive: U.S. probes China's ZTE over tech sales to Iran |
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See the best of Reuters photography.  See more | Photo caption  Fleet Week The U.S. Navy takes Manhattan for a week.  Slideshow  The SpaceX mission A privately owned unmanned rocket blasts off on a mission to be the first commercial flight to the International Space Station.  Slideshow  Exclusive: U.S. probes China's ZTE over tech sales to Iran Tweet Share this Email Print Related News Iran, big powers agree to hold more nuclear talks in June Thu, May 24 2012 Powers, Iran discuss detail of possible nuclear deal Wed, May 23 2012 IAEA chief says close to deal with Iran Tue, May 22 2012 No sign of breakthrough in U.N. nuclear chief's Tehran talks Mon, May 21 2012 U.N. nuclear chief hopeful on Iran deal before Baghdad meet Sun, May 20 2012 Analysis & Opinion Mike Lynch should try to buy Autonomy back JP Morgan’s reputation plunges Related Topics World » Cuba » Employees of ZTE chat on the roof of its headquarters in Shenzhen, Guangdong province, April 17, 2012. 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. Credit: Reuters/Tyrone Siu By Steve Stecklow WASHINGTON | Fri May 25, 2012 12:40pm EDT WASHINGTON (Reuters) - The Department of Commerce is investigating Chinese telecommunications equipment maker ZTE Corp for allegedly selling embargoed U.S. computer products to Iran. The investigation was launched following reports by Reuters in March and April that ZTE had signed contracts to ship millions of dollars worth of hardware and software from some of America's best-known tech firms to Telecommunication Co of Iran (TCI) and a unit of the consortium that controls it along with the Iranian regime. TCI is Iran's largest telecom carrier. "We've been pursuing it very aggressively," said a Commerce Department official. Investigators already have met with representatives of ZTE. A spokesman for ZTE, based in Shenzhen, China, declined to comment. The U.S. product makers - which included Microsoft Corp, IBM, Hewlett-Packard Co, Oracle Corp and Dell Inc, among others - have all said they were not aware of the Iranian contracts. The Commerce Department official said there is no evidence the American companies were complicit in the transactions. The U.S. companies either declined to comment about the investigation or did not respond to requests for comment. According to people familiar with the matter, some of the U.S. companies have received subpoenas requesting information about their dealings with ZTE and a Chinese trading company, Beijing 8-Star International Co, which also was a party to the Iranian contracts. According to contract documents, Beijing 8-Star was responsible for providing certain "relevant third-party equipments." One U.S. company received a subpoena in March requesting documents relating to "Sales to ZTE Corporation (any and all locations and offices to include but not limited to: U.S. locations, Hong Kong, China and Iran) and/or Beijing 8-Star International Company in Hong Kong or China," according to a person familiar with the matter. A representative of Beijing 8-Star could not be reached for comment. The U.S. has long banned the sale of American-made tech products to Iran. ZTE could face a variety of potential penalties, including fines of double the value of the U.S. products, according to the Commerce Department official. The department has penalized foreign companies in the past for U.S. sanctions violations. On Thursday, Reuters reported that the Panamanian subsidiary of Ericsson, the world's largest mobile-network equipment maker, had agreed to pay a $1.75 million penalty for violating U.S. export restrictions on Cuba between 2004 and 2007. The ZTE investigation is expected to take many months, the official said. Reuters reported on March 22 that ZTE had sold numerous American hardware and software products as part of a 98.6 million euro ($123.4 million) contract with TCI in December 2010. The products were listed in a ZTE parts list dated July 2011. They included HP computer parts and printers, Microsoft Windows software, Cisco switches, Dell flat-screen monitors, Oracle database products and Symantec Corp anti-virus software. The day after the article was published, a ZTE spokesman said the company would "curtail" its business in Iran. The company later issued a statement saying: "ZTE no longer seeks new customers in Iran and limits business activities with existing customers." Reuters also reported on April 10 that in June 2011, ZTE had agreed to ship millions of dollars worth of additional U.S. products, including IBM servers, to Aryacell, a unit of the consortium that controls TCI. The U.S. products comprised the bulk of an 8 million euro ($10 million) equipment-supply contract. In response, a ZTE spokesman said the company had decided "to abandon" the agreement after "we realized that the contract involved some U.S. embargoed products." Some of the U.S. companies have had partnerships with ZTE. But several said their agreements with foreign companies stipulate that their products cannot be distributed to embargoed countries. (Additional reporting by Sui-Lee Wee in Beijing. Editing by Michael Williams) World Cuba Related Quotes and News Company Price Related News Tweet this Link this Share this Digg this Email Reprints   We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/ Comments (5) DragonTattooz wrote:   Edition: U.S. Africa Arabic Argentina Brazil Canada China France Germany India Italy Japan Latin America Mexico Russia Spain United Kingdom Back to top Reuters.com Business Markets World Politics Technology Opinion Money Pictures Videos Site Index Legal Bankruptcy Law California Legal New York Legal Securities Law Support & Contact Support Corrections Connect with Reuters Twitter   Facebook   LinkedIn   RSS   Podcast   Newsletters   Mobile About Privacy Policy Terms of Use AdChoices Copyright Our Flagship financial information platform incorporating Reuters Insider An ultra-low latency infrastructure for electronic trading and data distribution A connected approach to governance, risk and compliance Our next generation legal research platform Our global tax workstation Thomsonreuters.com About Thomson Reuters Investor Relations Careers Contact Us   Thomson Reuters is the world's largest international multimedia news agency, providing investing news, world news, business news, technology news, headline news, small business news, news alerts, personal finance, stock market, and mutual funds information available on Reuters.com, video, mobile, and interactive television platforms. 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