ZTE caught selling equipment to Iran, Congress wants sales ban

Over the past few months, information surfaced that indicated that ZTE had been selling banned US telecommunications equipment to Iran. Digging in further, it appears that ZTE had plans to ship even more US computer equipment to Iran and was planning on covering up the operation by shredding all evidence related to the sales.

Seeing as you are reading this article, the plan did not go as intended and ZTE was caught in the act. Because of this CISCO, whose equipment was initially sold to Iran, has cut all ties with ZTE and many other US companies are now performing internal assessments to see if their equipment has been sold too. Seeing as ZTE has willfully violated sales bans placed upon Iran, Congress is now wanting to shut ZTE and Huawei out of US markets because of state influence. The report states:

The U.S. House of Representatives' Intelligence Committee said in a draft of a report to be released Monday that ZTE and fellow Chinese telecom equipment maker Huawei Technologies Co. Ltd should be shut out of the U.S. market because potential Chinese state influence on them poses a security threat. Both companies deny the allegation.

ZTE and Huawei are both providers of cell phones (and other communications equipment) that are sold here in the states and are typically a low cost mobile phone solution. If a sales ban is put in place, it would likely do significant harm to ZTE and Huawei's bottom line. 

Source: Reuters

Report a problem with article
Previous Story

Windows 8 free WiFi promotion launched in NYC and San Francisco

Next Story

Microsoft, Apple and Google help to launch new web standards

28 Comments

Commenting is disabled on this article.

It seems unfortunate that when a foreign government doesn't comply with a US led ban or sanction, then that country's economy and citizens end up getting hurt in one form or another.

The same folks complaining about the United States *supposedly* violating some international standard (which they just made up to give the Iranians a pretext) actually are screaming and moaning over nations that deliberately Break an embargo that is multinational in scope and that is FAR from secret (it's been all over the news for the past several years) - hypocritical much?

You break the rules - obvious ones - then expect there to be a fine levied.

Are all you people that out of touch with world events!!!

Iran continues to defy the United Nations Security Council on the matter of refusing to halt its uranium enrichment activities.

That is why there is a GLOBAL ban on Iran right now not just the United States.

AverageJoe70 said,
Are all you people that out of touch with world events!!!

Iran continues to defy the United Nations Security Council on the matter of refusing to halt its uranium enrichment activities.

That is why there is a GLOBAL ban on Iran right now not just the United States.

Thank you and Thanks to Brad for this article. every time I see this much lack of understanding from people I think all people died and tortured in iran including some of my friends died for nothing.

AverageJoe70 said,
Iran continues to defy the United Nations Security Council on the matter of refusing to halt its uranium enrichment activities.

I'm sorry, I must have missed something because I was under the impression that the US and Israel still maintain a nuclear arsenal and uranium enrichment facilities. And I missed the talk of a military invasion of North Korea now that it has acquired nuclear weapons.

Hang on a sec, no... surely it can't be? I just checked - the US is being hypocritical again.

Hey You all, I was born and raised in Iran and I think I am the most qualified person to comment about this. If you know how it feels when your best friend dies while protesting on the street for his rights and because of those fu***** chinese and russians the bloodthirsty regime have the technology to spy on him through his emails and phone calls. and he dies innocent at age 26. This is a true story and if you think not preventing any company to sell those equipment to Iranian regime is a good Idea, you're equally guilty.

S3P€hR said,
I was born and raised in Iran and I think I am the most qualified person to comment about this.

Ah, I can see where you went wrong there... the question is, can you?

Did they specify routers or switches? I work for big tech and there are pretty insane machines that could virtually sniff what people do 24x7. Congress does not want this to fall into the hands of Iran regime, which would in turn come down on native protestors.

If we follow this, America should be banned from the entire world. Talibans, Saddam Hussein ect were all an american "creation".

This is going a little too far. Ok maybe they shouldn't have done it but it's only computer equipment or christs sake. It was pretty stupid of them to be selling the Cisco hardware they make to Iran without Ciscos knowledge. That's just wrong for an OEM no mater what.

Oh no, selling computer equipment to Iran - that's outrageous! Time to invade. /s

Perhaps I'd take the US more seriously if it wasn't selling weapons to rebel factions in countries like Syria, turning entire continents into war zones and resulting in hundreds of thousands of deaths. Last time I checked weapons are more dangerous than routers. It's also interesting that this comes shortly after the US blocked Chinese ownership in a wind farm in Oregon, citing national security concerns. It looks a bit like protectionism to me.

theyarecomingforyou said,
Oh no, selling computer equipment to Iran - that's outrageous! Time to invade. /s

Perhaps I'd take the US more seriously if it wasn't selling weapons to rebel factions in countries like Syria, turning entire continents into war zones and resulting in hundreds of thousands of deaths. Last time I checked weapons are more dangerous than routers. It's also interesting that this comes shortly after the US blocked Chinese ownership in a wind farm in Oregon, citing national security concerns. It looks a bit like protectionism to me.

Good, I don't want chinese companies controlling my power grid.

NastySasquatch said,
Good, I don't want chinese companies controlling my power grid.

I thought the US was all about the free market? Oh, I keep forgetting that xenophobia trumps capitalism.

theyarecomingforyou said,
I thought the US was all about the free market? Oh, I keep forgetting that xenophobia trumps capitalism.

Ah, the classic xenophobic/racist trump card.

It couldn't have anything to do with a persistent military threat from the Chinese military across the United States. Whether or not you buy it is irrelevant, as a UK citizen, as it is a documented belief within the US government, and that is all the justification that is necessary to avoid the US government and its infrastructure-based companies (telecoms) from purchasing possibly tainted products from a nation that is filled with corruption; the regular cases of lead-based paints on children's toys, poisoned animal foods, currency-fixing, rare-mineral limiting, and intellectual theft should be enough to make that point clear.

The fact that we, as a global community, are stupid enough to use the nation for their immense labor force is our own fault. But that doesn't mean that the status quo needs to stay the same.

It also doesn't mean that it's racist or xenophobic, and the fact that you see xenophobia when people obviously complain about a documented pattern from the nation speaks volumes to your character.

I somehow doubt a US sales ban will hurt these companies in any serious way. Maybe it'll be a fender bender, but not much more.

paulheu said,
I somehow doubt a US sales ban will hurt these companies in any serious way. Maybe it'll be a fender bender, but not much more.

Getting your product banned from the largest economy in the world is no fender bender.

FloatingFatMan said,
Oh come now... This is a US ban, not a worldwide one. They can't expect foreign companies to comply with it!
I'm confused by what you mean... Yes, a US ban means foreign companies can still sell ZTE/Huawei products. They don't have to comply.

cybertimber2008 said,
I'm confused by what you mean... Yes, a US ban means foreign companies can still sell ZTE/Huawei products. They don't have to comply.

I mean that ZTE are a foreign company, selling to Iran, which breaks no laws at all. WTF are the US gov on, expecting a foreign company to comply with a local ban?

FloatingFatMan said,
Oh come now... This is a US ban, not a worldwide one. They can't expect foreign companies to comply with it!

according to US sanction any company that deals with Iran in certain areas including Telecommunication and related electronic equipment will be banned from US market. IF ZTE, Hiawei Chose Iran over US market then it is what it is and your statement is irrelevant.

FloatingFatMan said,

I mean that ZTE are a foreign company, selling to Iran, which breaks no laws at all. WTF are the US gov on, expecting a foreign company to comply with a local ban?

Wake up - Congress, which is responsible for trade (all trade treaties must go through Congress) has LONG had a policy in place that if a foreign company violates a US-passed (Congress) trade embargo, they can be penalized for it - up to and including loss of access to the US market. (Toshiba ran afoul of this back during Reagan's first term by selling prohibited machining equipment to the Soviet navy - never mind that it was the Japanese - not US - arm of Toshiba that broke the law.) No - it likely is NOT a major issue for either Huawei OR ZTE - neither has any sort of presence in the US outside of Hawaii *right now*; however, both companies are trying to create such a presence; both have major deals with Verizon Wireless that this flap could cause to flop.

FloatingFatMan said,

I mean that ZTE are a foreign company, selling to Iran, which breaks no laws at all. WTF are the US gov on, expecting a foreign company to comply with a local ban?

But aren't these countries apart of the UN and as such, have to abide by their decisions.

FloatingFatMan said,
Oh come now... This is a US ban, not a worldwide one. They can't expect foreign companies to comply with it!
If you want to do business in the US, or business with US Businesses, then you need to respect US Embargos. This isn't that shocking..