China has sold Iran millions of dollars worth of embargoed U.S. computer equipment, as reported by Steve Stecklow at Reuters.State-owned ZTE Corp (ZTE), China’s second-largest telecommunications equipment maker, agreed to a $10.5 million contract for “third-party” equipment with a part of Telecommunication Co. of Iran (TCI).
TCI is a government-controlled company that has a near monopoly on Iran’s landline telephone services, and its network hosts much of Iran’s internet traffic.
The deal, dated June 30, 2011, contains more than 20 different computer products from U.S. companies, including 30 IBM servers and other IBM equipment at a total cost of more than $8.9 million (minus a discount of about 30 per cent).
According to the contract’s parts list, the equipment to be delivered from China included IBM servers; switches made by Cisco Systems Inc and Brocade Communications Systems Inc; database software from Oracle Corp and a unit of EMC Corp; Symantec back-up and ant-virus software; and a Juniper Networks firewall. The parts were intended for business-support services, including a ZTE billing system.
A spokesman for ZTE told Reuters that the company had not yet shipped the products, did not intend to ship them and decided to abandon the agreement after they realised that the contract involved some U.S. embargoed products.
But Steklow notes that it’s unclear how ZTE will get out of the deal because the contract states that it can only be terminated if the Iranian company breaches it, becomes bankrupt or can’t pay its debts.
Last month Reuters reported that ZTE and TCI agreed to a $130.6 million contract in December 2010 for network equipment that included a powerful surveillance system capable of monitoring landline, mobile and internet communications.
That deal contained some American hardware and software products (that weren’t part of the surveillance system) from Microsoft, Hewlett-Packard and Dell. All three companies said they were unaware of the Iranian contract.
NOW WATCH: Briefing videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.