Chinese executives ‘cooperating’ in Iran export probe


The House Intelligence Committee is looking into efforts by ZTE and another major Chinese telecommunications company, Huawei, to expand the operations of their U.S. subsidiaries. Lawmakers have expressed concern that the companies have close links to the Chinese government and military and could be involved in spying on U.S. competitors (Tyrone Siu/Reuters)
September 13, 2012

A senior executive of a major Chinese technology firm acknowledged Thursday that his company is in discussions with U.S. authorities in connection with accusations that it sold surveillance and computer equipment to Iran in violation of U.S. export control laws.

“We are actively cooperating with branches of the U.S. government to investigate this matter and get to the bottom of the truth,” Zhu Jinyun, a senior vice president of ZTE Corp., told the House Intelligence Committee.

The committee is looking into efforts by ZTE and another major Chinese telecommunications company, Huawei, to expand the operations of their U.S. subsidiaries. Lawmakers have expressed concern that the companies have close links to the Chinese government and military and could be involved in spying on U.S. competitors.

Recent media reports disclosed that federal agencies were investigating allegations that ZTE sold a surveillance system and banned U.S. computer equipment to Iran’s Telecommunication Co., the country’s largest telecom firm. The sales reportedly included equipment from well-known U.S. technology companies and would have violated U.S. laws.

In response to questioning by Rep. Sue Myrick (R-N.C.), Zhu said that ZTE has never sold equipment to the Iranian government and that it has been cooperating in the U.S. inquiry.

ZTE, he said, also is involved in talks with U.S. investigators over limiting its sales in Iran. “We have a detailed plan to do that, and actually have been in communication with branches of the U.S. government about that very subject,” he said.

Myrick also asked Zhu about allegations that ZTE had destroyed or hidden documents that might be relevant to the U.S. investigation.

“As a global multinational, we abide by all the laws and regulations of the jurisdictions that we operate in, and we would never do something like that,” Zhu responded.

The Commerce Department is investigating the Iranian sales and the FBI is looking into allegations of a coverup, according to an excerpt from an FBI affidavit published in July by the Web site Smoking Gun.

Charles Ding, a senior vice president of Huawei, also testified Thursday. He said the only equipment his company has sold to Iran was for “commercial, civilian” use.

Legal experts said it is unclear whether that would violate U.S. sanctions barring sales to Iran, which was also a concern of Myrick. Although foreign companies have the ability to do business with Iran, federal law bars involvement by U.S. subsidiaries or the sale of goods made in the United States without special permission.

Myrick asked both executives to provide the committee with a list of the countries in which they have limited business operations to comply with federal laws and sanctions.

Committee Chairman Mike Rogers (R-Mich.) said the firms had turned over many documents, “but very few” relate to questions the panel has asked.

Ellen Nakashima is a national security reporter for The Washington Post. She focuses on issues relating to intelligence, technology and civil liberties.
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