Huawei’s Supply Work in Iran Should Be Investigated, U.S. Lawmakers Say

Six U.S. lawmakers urged the State Department to investigate whether Huawei Technologies Co. violated U.S. law by supplying sensitive technology to Iran.

Huawei, China’s largest maker of phone equipment, said Dec. 9 it would voluntarily restrict business in Iran because of that country’s “increasingly complex situation.” The Shenzhen, China-based company said it wouldn’t seek new customers in Iran and will limit the scope of business with existing clients.

While calling Huawei’s decision on Iran a “positive step,” the lawmakers in a Dec. 22 letter to U.S. Secretary of State Hillary Clinton said the company’s “previous actions and continuing service of existing contracts with Iranian clients may violate” an Iran sanctions law passed in 2010. The letter was released yesterday by the office of Representative Sue Myrick, a North Carolina Republican.

The law, the Comprehensive Iran Sanctions, Accountability and Divestment Act, prohibits the U.S. government from “entering into or renewing a contract with a company that exports sensitive telecommunications technology to Iran,” the lawmakers wrote.

The letter was signed by Republican Senators John Kyl of Arizona, Jeff Sessions of Alabama and James Inhofe of Oklahoma; Democratic Senator Sheldon Whitehouse of Rhode Island; and Republican Representatives Frank Wolf of Virginia and Myrick.

The State Department press office didn’t immediately respond to a request for comment.

‘Strict Compliance’

Prior to its Dec. 9 announcement, “Huawei’s business in Iran was limited to providing commercial-grade telecommunications equipment to commercial operators built to global standards in strict compliance with all international laws and regulations, as well as U.S. and other sanctions regimes,” William Plummer, a Washington-based spokesman for Huawei, said in an e-mail yesterday.

Huawei said in November that it had sold telecommunications equipment and a “mobile news delivery platform” to MTN Irancell Telecommunications Services Co., Iran’s second-largest mobile provider, and denied the gear was intended for use in censorship.

In their letter, the U.S. lawmakers cited Wall Street Journal and Bloomberg News reports in October that Iranian authorities use technology purchased from foreign companies to monitor dissidents.

The State Department should also review whether telecommunications companies operating in Iran, including Huawei, have violated other U.S. sanctions, “such as those prohibiting companies from engaging in business with the Islamic Revolutionary Guard Corps,” according to the letter.

Security Concerns

Huawei’s efforts to expand in the U.S. have run into opposition from lawmakers who allege that the company is linked to China’s military, an assertion that Huawei has denied. The U.S. Commerce Department said in October it had barred Huawei from participating in a nationwide emergency network, citing national security concerns.

The U.S. House Intelligence Committee said in November it had opened an investigation into the possible security threat posed by Chinese phone-equipment makers such as Huawei. The panel said it will focus on whether the companies’ expansion in the U.S. provides opportunity for Chinese espionage and imperils the U.S. telecommunications infrastructure.

To contact the reporter on this story: Eric Engleman in Washington at eengleman1@bloomberg.net

To contact the editor responsible for this story: Michael Shepard at mshepard7@bloomberg.net

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