Huawei linked to plan to sell restricted equipment to Iran

A major partner of the Chinese telecommunications gear maker offered to sell $1.7 million worth of embargoed HP computer equipment to Iran, according to documents reviewed by Reuters.

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Already considered a potential threat to U.S. national security, Huawei is again finding itself under scrutiny, linked to an offer to sell embargoed computer equipment to Iran.

A major partner of the Chinese telecommunications gear maker offered to provide 1.3 million euros ($1.7 million) of Hewlett-Packard computer equipment to Iran in 2010, according to documents reviewed by Reuters. However, Huawei says neither it nor Hong Kong-based Skycom, its privately owned partner, provided the equipment to Mobile Telecommunication Co of Iran, known as MCI.

The proposal focused on expanding MCI's subscriber billing system and included at least 13 pages marked "Huawei confidential" and carrying the Huawei company logo, according to Reuters. Those documents featured a price list for new HP equipment that included one server, 20 disk arrays, and 22 switches, as well as software.

In a statement, Huawei called the proposal a bidding document and said it was submitted by Skycom.

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.

The two Chinese companies appear to have close ties, with Reuters noting that the two share headquarters in China and Skycom employees in Tehran wear Huawei badges.

The report emerges just months after Cisco Systems ended its relationship with ZTE -- another Chinese telecommunications gear maker -- after it was revealed that ZTE was selling Cisco-branded networking equipment to Iran. The Shenzhen, China-based telecommunications giant reportedly sold restricted and banned computer equipment developed by Cisco and other U.S.-based companies to Iran's telecoms firms.

In October, the U.S. House Intelligence Committee released a report accusing Huawei and ZTE of being threats to U.S. security and discouraging U.S. companies from buying their equipment.

"U.S. network providers and systems developers are strongly encouraged to seek other vendors for their projects," the committee wrote in its 52-page report. "Based on available classified and unclassified information, Huawei and ZTE cannot be trusted to be free of foreign state influence and thus pose a security threat to the United States and to our systems."

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