EXCLUSIVE - Huawei partner offered embargoed HP gear to Iran

Mon Dec 31, 2012 11:56am IST

A HP Invent logo is pictured in front of Hewlett-Packard international offices in Meyrin near Geneva August 4, 2009. REUTERS/Denis Balibouse/Files

A HP Invent logo is pictured in front of Hewlett-Packard international offices in Meyrin near Geneva August 4, 2009.

Credit: Reuters/Denis Balibouse/Files

Related Topics

Kishore Pandey, 82, lies on a bed as his daughter, Usha Tiwari, holds him and a priest stands by them (L) at Mukti Bhavan (Salvation House) in Varanasi, in the northern Indian state of Uttar Pradesh, June 19, 2014. REUTERS/Danish Siddiqui

Waiting to die at Salvation House

The city of Varanasi is Hinduism's holiest city and many Hindus believe that dying there and having their remains scattered in the Ganges allows their soul to escape a cycle of death and rebirth.  Slideshow 

REUTERS - 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.

China's 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."

In 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.

Huawei 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."

The 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.

CLOSE LINKS

Huawei and its Iranian partner, Skycom, appear to have very close ties.

An 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."

On 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.

"In 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."

The 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.

Asked 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 customer's equipment."

Officials with MCI did not respond to requests for comment.

In 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.

(Additional reporting by Grace Li and Chyen Yee Lee in Hong Kong and Marcus George in Dubai; Edited by Simon Robinson)

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

TECH SHOWCASE

Apple Results

Apple Results

Apple margin concerns fade, focus shifts to iPhone launch  Full Article 

Expansion Plans

Expansion Plans

EBay plans to expand in Russia despite sanctions.  Full Article 

Outlook Weighs

Outlook Weighs

Qualcomm posts higher quarterly results  Full Article 

'Selfie' Boom

'Selfie' Boom

Sony invests in image sensor production amid 'selfie' boom.  Full Article 

Cyberfraud Case

Cyberfraud Case

Seven arrests made in $1.6 million StubHub cyberfraud case  Full Article 

Q2 Below Forecast

Q2 Below Forecast

AT&T revenue misses estimates as promotion weighs on revenue  Full Article 

WhatApp Leak

WhatApp Leak

Israel detains soldiers after WhatsApp leaks about Gaza casualties   Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device.  Full Coverage