Cisco, Sun, HP tech used in Iran despite sanctions -- report

It is prohibited for any U.S. person, company, organization, or agency to have any sort of business dealing that involves selling goods or services to Iran, because of U.S. government sanctions.

However, today it was reported by Reuters that Iran's second-largest mobile operator, MTN Irancell, seems to have gotten its hands on mobile computer equipment from several U.S. companies, including Sun Microsystems, Hewlett-Packard, and Cisco Systems.

Though it's still unclear just how MTN Irancell got the equipment, Reuters has held several interviews and uncovered dozens of documents it says confirm that MTN Irancell wanted this mobile technology and that the tech is readily available throughout Iran despite U.S. sanctions.

"There's nothing you can get in the U.S. or Dubai that you can't get in Iran," MTN's top executive in Iran from 2004 to 2007, Chris Kilowan, told Reuters. "All the procedures and processes around procurement were established by MTN."

Kilowan told Reuters than MTN Irancell's parent company, MTN Group, was directly involved in getting the U.S. parts for MTN Irancell and that it agreed to let its Iranian partners and MTN Irancell create an Iranian firm with the "basic" purpose of skirting sanctions on Iran.

Reuters also reported that in a 2008 MTN Irancell document, the mobile operator said it was "specifically interested in acquiring embargoed products."

MTN Irancell is owned by MTN Group, which is based in South Africa, and an Iranian government-controlled consortium. According to Reuters, MTN owns 49 percent of the joint business. MTN Group's current chief corporate affairs officer, Paul Norman, told Reuters a different story than Kilowan.

"To the best of our knowledge, MTN personnel, directly or indirectly, did not acquire or seek to acquire equipment for use in Irancell's operations in a manner that was intended to avoid or circumvent U.S. sanctions," he said. "MTN is committed to compliance with U.S. sanctions, and is working with the U.S. government and its international legal counsel to remain compliant."

The U.S. companies whose parts were being used by MTN Irancell told Reuters that they did not know their equipment was available in Iran and that they were investigating the matter.

"We have been unable to find any information suggesting that Cisco employees were aware of any sales of Cisco equipment to Iran," a Cisco representative told Reuters. "We continue to investigate this matter, as any violation of U.S. export controls is a very serious matter." Oracle, which owns Sun Microsystems, and HP responded the same.

However, Reuters reports that Kilowan said the three companies, with MTN Group's consent, set up an Iranian firm to "camouflage" the buying of embargoed equipment. This firm listed MTN Irancell as its only customer and said it was "involved in procurement for the telecom carrier's data center." A source told Reuters that this firm was able to obtain equipment, without any problems, from Sun and HP that was routed through Dubai.

The U.S. sanctions against Iran were initially launched under President Ronald Regan in 1987 and have had several reiterations by subsequent U.S. presidents. The central purpose is to curb Iran's nuclear program. According to the U.S. Department of the Treasury, criminal penalties for violating the sanctions could end up in a fine of up to $1 million and possible imprisonment for up to 20 years.