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Cisco gear sold to Iran despite sanctions

HP and Oracle Sun servers also purchased by mobile operator circumventing US embargo

By Jim Duffy on Thu, 06/07/12 - 2:31pm.

Despite sanctions that prohibit sales of American technology to Iran, an Iranian mobile operator was able to source equipment from Cisco, HP and Sun, which is now owned by Oracle. According to Reuters, MTN Irancell, a joint venture between MTN Group Ltd of South Africa and an Iranian government-controlled consortium, obtained gear from the three companies through a network of tech companies in Iran and the Middle East.

This procurement took place while the US is imposing sanctions on Iran to attempt to curb its nuclear program. Under the sanctions, no U.S. company can sell goods or services to Iran unless it obtains special authorization.

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But enforcement of the U.S. sanctions has been targeted at Iranian banks, the country's oil industry, terrorism, and individuals and companies that are believed to be involved in Iran's nuclear development program, according to Reuters. Iranian telecommunications workers say U.S. technology remains widely available in Iran today.

In the MTN Irancell case, the mobile operator established a separate Iranian company with its partners in order to circumvent the sanctions and obtain equipment, Reuters reports. MTN Group Ltd of South Africa, which owns a non-controlling 49% stake in MTN Irancell, said the company did not knowingly seek to bypass U.S. sanctions in procuring equipment for the mobile operator.

But Reuters claims to have documents from interviews with MTN Irancell officials indicating the opposite. And those documents list Cisco routers, Sun servers and products from HP among its targeted purchases.

A former project manager at MTN Irancell said in an interview with Reuters that he was present when the operator received more than 10 Cisco routers and numerous switches in 2007 from a telecom service provider based in Kuwait. But an official at that Kuwaiti service provider said his company purchased the equipment from a local Iranian company and did not import it from Kuwait.

Cisco, Oracle and HP were not aware that they were selling equipment to MTN Irancell, according to Reuters. Cisco and Oracle said they were looking into it.

And Cisco offered Reuters and Network World this response:

"Cisco complies with all US export laws and requires our business partners to expressly acknowledge that they too must abide by these laws. We have been unable to find any information suggesting that Cisco employees were aware of any sales of Cisco equipment to Iran. Products such as these, which are not subject to individual export licenses, can be purchased from distributors and resold without Cisco's knowledge or control. We continue to investigate this matter, as any violation of U.S. export controls is a very serious matter."

HP said its distribution contract terms prohibit sales into Iran and that compliance with US and international trade law is a high priority for the company.

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