Technology

"China has sold Iran millions of dollars worth of embargoed U.S. computer equipment, as reported by Steve Stecklow at Reuters...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 (Business Insider,  "China Went Ahead And Sold Iran $10 Million Of Forbidden US Computer Equipment," 4/11/2012).

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"IBM Italia Servizi Finanziari S.p.A., a 100 percent owned subsidiary of IBM Italy, currently has an equipment financing lease with an Italian company called Irasco.  IBM’s original inspection of Irasco indicated it to be an Italian subsidiary of Ascotec Gmbh, a German company holding 51 percent of Irasco’s equity.  Upon further inspection of Ascotec (the German company), it was discovered to be wholly owned by Iranian Mines and Mining Industries Development and Renovation Organization (IMIDRO)." (CORRESP for INTERNATIONAL BUSINESS MACHINES CORP, 4/16/2009)

"IBM does not believe that the financing agreement between IBM Italy and Irasco constitutes a material risk to our investors, whether analyzed on a quantitative or qualitative basis.  From the perspective of quantitative materiality, at inception, the financing lease provided for total revenue to IBM of $106,652." (CORRESP for INTERNATIONAL BUSINESS MACHINES CORP, 6/8/2009)

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IRASCO's main clients are in Iran, including the National Iranian Oil Company (controlled by the IRGC) (IRASCO client list)

Iranian suppliers of Mettler-Toledo products, according to the company website. (Company Website)

In correspondance with the SEC and in their 8-K forms for the SEC, Checkpoint Systems disclosed few details regarding their business in Iran.

“On July 23, 2009, the Company responded to an Administrative Subpoena issued by the Office of Foreign Assets Control (“OFAC”) of the Department of the Treasury regarding sales by the Company’s non-U.S. subsidiaries to Iran. In connection with preparing its response to the OFAC subpoena, the Company undertook an internal review to ascertain facts relating to any sales to Iran within the preceding five years. As a result of this review, the Company determined that European subsidiaries of the Company had sold standard products to Iran.” (UPLOAD for CHECKPOINT SYSTEMS INC, 2/4/2010)

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“For the first quarter of 2008, SG&A expense includes a charge of $1.4 million related to a deferred compensation expense adjustment from a prior period, and $1.6 million higher bad debt provision compared to the first quarter of 2007 primarily due to a general increase in the age of accounts receivable, primarily attributable to customers outside the U.S. and a provision established for a distributor in Iran." (EX-99.1 of 8-K for CHECKPOINT SYSTEMS INC, 5/7/2008)

AMD's website states that the company is "committed to fully comply with the United States and all applicable export and import laws and regulations governing the export, re-export, or import of AMD products, software, services and technology. AMD's Global Trade Compliance organization is responsible for providing guidance and support of AMD's global export and import compliance obligations... AMD products, services, and technology are prohibited for U.S. export or re-export to Cuba, Iran, North Korea, Sudan, and Syria or to any country or end-use subject to U.S. trade sanctions."

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AMD says it hasn't authorised any product shipments to Iran, directly or indirectly, but somehow the Iranian High Performance Research Center (IHPCRC), which is located at Tehran's Amirkabir University of Technology, says it has assembled a Linux-based system with 216 Opteron processing cores (an AMD product).  There is a connection through Thacker, also known as Sky Electronics, an authorised distributor of AMD products based in the United Arab Emirates. (The Enquirer, "AMD is inside Iran's missiles and supercomputers," 6/17/2009)

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In response to reports that AMD processors had been used to build Iran's most powerful supercomputer, the SEC wrote AMD the following correspondence on May 8, 2009:

"It appears from exhibit 21 to your Form 10-K, exhibit 99.1 to your Form 8-K, and the “AMD Worldwide” section of your website that you have operations in the Middle East and Africa, which are regions that include Iran, Syria, and Sudan. In addition, we are aware of a December 2007 news report that your processors have been used to build Iran’s most powerful supercomputer. Iran, Syria, and Sudan are identified by the State Department as state sponsors of terrorism, and are subject to U.S. economic sanctions and export controls. We note that your Form 10-K does not include disclosure regarding contacts with Iran, Syria, or Sudan. Please describe to us the nature and extent of any past, current, and anticipated contacts with the referenced countries, whether through joint ventures, distributors, resellers, or other direct or indirect arrangements. Your response should describe any products or technology you had provided to the referenced countries, directly or indirectly, and any agreements, commercial agreements, or other contacts you have had with the governments of those countries or entities controlled by those governments."

In a June 19, 2009 response letter to the SEC, AMD wrote:

"In response to the Staff’s comment, the Company advises the Staff that AMD has not had any direct authorized contacts with Iran, Syria or Sudan (collectively, the “Embargoed Countries”). The Company has not provided any products or technology to the Embargoed Countries and has had no agreements, commercial agreements or other business contracts with the governments of the Embargoed Countries or entities controlled by those governments.The Company has an established export management system (“EMS”) which sets forth strict policies relating to its export related activities. The Company has designed these policies to ensure compliance with U.S. export control laws. The EMS governs the review of all sales and shipments to countries which are subject to U.S. economic and export sanctions. In addition, it is the Company’s policy that all authorized distributors of AMD products contractually commit that they will fully comply with all U.S. export control laws with respect to their sales and shipments of AMD products. The Company also periodically requests that its authorized distributors reaffirm these commitments...

Supporting material sent to the Committee on Foreign Investment in the United States (“CFIUS”) in December 2008 corroborated the above findings. The responses detail the controls that AMD has in place, including EMS, to prevent its distributors from selling products to prohibited end-users. These materials also contradict the articles referenced by the Staff that AMD processors were used in the construction of an Iranian supercomputer, showing that there are no records that indicate any improper or illegal shipment of technology to Iran, Syria or Sudan by AMD. Again, we are happy to provide you with copies of these materials.

The Company respectfully advises the Staff that in the rare occasions in the past where the Company has discovered an unauthorized resale by a distributor or direct customer of its product to an Embargoed Country, AMD has immediately terminated the export of its products to such customers or distributors if such customer or distributor does not agree to immediately cease such sales."

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"Chipmaker AMD is red-faced after a bunch of Iranian boffins smuggled 216 Opteron chips into the country and built themselves a supercomputer. Iran has loads of trade embargoes against it as part of a punishment for not liking America much. One of the embargos forbids the import of IT gear so that the Iranians cannot get their paws on a supercomputer.

Scientists at the Iranian High Performance Computing Research Center at the country's Amirkabir University of Technology have said that they have built a supercomputer using 216 AMD Opterons in a Linux cluster. They think that it can manage 860 giga-flops. But the development is extremely embarrassing for AMD which claims it has never shipped its chips to Iran or allowed anyone else to do so. No doubt AMD is expecting a visit from US law enforcement people who want to know how the chips got to Iran.

A spokesAMD said that the company complies with all United States export control laws. Any shipment of AMD products to Iran by any authorised distributor of AMD would be a breach of the specific provisions of their contracts with AMD." (The Inquirer, "AMD probed over Iran supercomputer build," 12/7/09)

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"Despite federal antiterrorism trade sanctions that bar the sale of U.S.-made computer technology to Iran, a computing research center in Tehran claims to have used Advanced Micro Devices Inc.'s Opteron processor to build the Middle Eastern country's most powerful supercomputer. The Iranian High Performance Computing Research Center (IHPCRC), which is located at Tehran's Amirkabir University of Technology, said in an undated announcement on its Web site that it has assembled a Linux-based system with 216 Opteron processing cores. That's a relatively small supercomputer, with a claimed peak performance level of 860 billion floating-point operations per second, or gigaflops. But the research center said that the system, which will be used for weather forecasting and meteorological research, is the fastest built in Iran to date." (Computerworld, "Iranians claim to have built Opteron-based supercomputer," 12/6/07)

“An Austin businessman pleaded guilty in federal court Wednesday to making false statements to federal agents about doing business with Iran, in violation of the U.S. trade embargo. A plea agreement calls for Rex Wen Wei Liang, 57, whose company Fametech America manufactures bar code and magnetic strip scanners, to receive probation. U.S. District Judge Sam Sparks must approve that deal at Liang's sentencing in October. Outside court, Assistant U.S. Attorney Gregg Sofer said such prosecutions have been rare in Austin. But, he said, the Justice Department is ‘keenly interested in making sure that this doesn't happen’ and is stepping up efforts to control the illegal flow of technology from Austin to Iran and other places where such trade is prohibited.” (American-Statesman, "Businessman admits to lying about violating ban on trade with Iran," 8/13/09)

Listed by U.S. Government as doing business in Iran. (U.S. Securities and Exchange Commission, List of Companies Doing Business With State Sponsors Of Terror, Removed from the internet in July of 2007)

Redington Gulf, one of the leading IT distributors and supply chain solutions providers in Middle East and Africa, strongly reacted to media reports about HP violating US trade sanctions by using Redington as a vehicle to sell printing products in Iran. An article published by The Boston Globe identified Redington as a sales channel for HP printers in Iran and quoted a US Treasury Department official as saying US companies are prohibited from selling goods to a distributor if they know the products are intended for Iran.

Clarifying Redingtons position on this issue, Mr. Raj Shankar, CEO, Redington Gulf, said, "Redington is an authorised distributor of HP. We sell authorized products, to HP authorized customers, in authorized territories, in line with HPs policy guidelines. We have an authorised contract with HP that permits the sale of certain printer lines and supplies to approved Iranian customers. We have a separate contract for Iran and we are allowed to sell a certain type of products, which they classify as EAR99. Under the terms of the contract, Redington is authorised to fulfil and execute sales of specific printer lines to approved Iranian customers in Jebel Ali or the UAE, he explained. (Middle East Company News Wire, Redington Gulf strongly reacts to misleading reports, January 20, 2009)

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Hewlett-Packard Co. said late Thursday that it would stop a distributor from selling its products in Iran. The computer and printer maker acknowledged that it knew the sales were occurring despite trade sanctions on Iran, but maintained it did nothing illegal and was halting the practice to go beyond the letter of the law. The Boston Globe reported last week that HP could be in violation of U.S. export laws because of an arrangement it had with Redington Gulf, a technology distributor in the Middle East, to sell HP printers in Iran. (Associated Press, HP says it will stop distributors sales in Iran,  January 8, 2009)

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HP printers have become a top seller here, despite a comprehensive embargo that prohibits the California-based company from sending its products to Iran the lions share of HP printers, among the most visible of US goods here, come not through smugglers, but through a series of international transactions that enable HP to sidestep US sanctions. In 1997, two years after President Clinton banned trade with Iran, HP struck a partnership with a newly formed company in Dubai to sell its products in the Middle East. At the time, the company, called Redington Gulf, had only three employees and its sole purpose was to sell HP supplies to the Iran market, says a history on Redington Gulfs website and Rajesh Chandragiri, the administrative manager in Redington Gulfs Dubai office. (Boston Globe, "HP uses third party to sell printers in Iran," December 29, 2008)

"HP acquired the Apogee group, a U.K. based office equipment dealer, on November 1, 2018.  During the second quarter of 2019, HP discovered that its newly acquired subsidiary had invoiced one payment and accepted two payments from Bank Sepah International plc shortly after the acquisition, under a legacy contract for copier services.  Bank Sepah International plc is subject to U.S. sanctions pursuant to Executive Order 13382. The combined total value of the transactions was £72.49 ($92.78).  We are unable to accurately calculate the net profit attributable to these transactions.  Following HP’s discovery of these transactions and at HP’s direction, Apogee terminated the contract with Bank Sepah International plc.  HP is in the process of disclosing relevant transactions related to the Apogee acquisition to the relevant authorities." (SEC Disclosure, 5/30/2019)

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HP discovered that its newly acquired subsidiary, Apogee group, processed two service calls during November 2018, shortly after the acquisition, for toner replacement on behalf of Bank Saderat plc, with which it had a legacy contract. Following HP’s discovery of these transactions and at HP’s direction, Apogee terminated the contract with Bank Saderat plc. (SEC Disclosure, 12/12/2019).

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The Iranian company, DAYA SERVER, is engaged in the sale and support of HPE products. (DAYA SERVER Website, “Customers”). (DAYA SERVER Website, “Customers”). 

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 "HP has a policy of complete compliance with all US export laws. We don't sell products directly to Iran and we don't have any employees or facilities in that country. Having recently examined the situation, we believe it's important to go beyond the letter of the law. HP is taking further steps with distributors in the Middle East intended to prevent the distribution of our products in Iran by third parties. These actions include tightening distributor contract terms to explicitly prohibit the sale of HP products in Iran, more closely monitoring the activities of our distributors in the Middle East, and conducting even more frequent audits of our distributors in the region." (Company Website)

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“A major infiltration of a military network blamed on Iran was facilitated by a poorly written contract with computer-services provider Hewlett-Packard Co. , said people familiar with the matter. H-P's contract with the military didn't require it to provide specific security for a set of Navy Department databases, and as a result, no one regularly maintained security for them. That eased access for hackers, who used the opening to penetrate deep into the Navy Marine Corps Intranet network, said people familiar with the matter. The findings of the Navy's investigation are being closely watched by lawmakers on Capitol Hill, who next week are set to evaluate the nomination of Vice Adm. Michael Rogers as National Security Agency director. Adm. Rogers was the Navy cyber chief who oversaw the response. The intrusion, which officials said didn't compromise classified information or email, took about four months to clean up. The Navy has been working to address lapses revealed by the hack and other security efforts under what it calls Operation Rolling Tide. The infiltration is the only publicly known penetration of a military network blamed on Iranian hackers…The hacking ‘is a contracting failure and not a technology failure,’ said one cybersecurity specialist familiar with the situation. ‘This is a Dilbert cartoon.’ H-P on its website calls the Navy and Marine Corps network ‘the world's largest and most secure intranet,’ saying that ‘improved security is unquestionably NMCI's greatest value.’ The network's security system detects more than 800 new viruses each month, it says. An H-P spokesman declined to comment on the infiltration.” (Wall Street Journal, “Navy Hacking Blamed on Iran Tied to H-P Contract,” 3/6/14)

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"A major Iranian partner of Huawei Technologies offered to sell at least 1.3 million euros worth of embargoed Hewlett-Packard computer equipment to Iran's largest mobile-phone operator in late 2010, documents show. China's Huawei, the world's second largest telecommunications equipment maker, says neither it nor its partner, a private company registered in Hong Kong, ultimately provided the HP products to the telecom, Mobile Telecommunication Co of Iran, known as MCI... Huawei has a similar partnership with HP. In a statement, the Palo Alto, Calif., company said, 'HP has an extensive control system in place to ensure our partners and resellers comply with all legal and regulatory requirements involving system security, global trade and customer privacy and the company's relationship with Huawei is no different.' The statement added, 'HP's distribution contract terms prohibit the sale of HP products into Iran and require compliance with U.S. and other applicable export laws.'... The proposal makes clear that HP computer servers were an integral part of the 'Hardware Installation Design' of the expansion project. Tables listing equipment for MCI facilities at a new site in Tehran and in the city of Shiraz repeatedly reference HP servers under the heading, 'Minicomputer Model.'... The pages list prices for HP servers, disk arrays and switches, including those that already are 'existing' and others that need to be added. The total proposed project price came to 19.9 million euros, including a 'one time special discount.' The proposed new HP equipment, which totaled 1.3 million euros, included one server, 20 disk arrays, 22 switches and software . The existing HP equipment included 22 servers, 8 disk arrays and 13 switches, with accompanying prices. Asked who had provided the existing HP equipment to MCI, Vic Guyang, a Huawei spokesman, said it wasn't Huawei." (Reuters, "Exclusive: Huawei partner offered embargoed HP gear to Iran," 12/30/12)

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"But because its products are often sold by others through indirect channels without its knowledge or consent 'it is always possible that products may be diverted to Iran or Syria after being sold to channel partners, such as distributors and resellers,' HP said... HP said in both letters that it would continue to work with ZTE, but it had conducted an internal investigation relating to an alleged sale of its products to MTN Irancell, Iran's second largest mobile carrier." (Reuters, "HP says products may have been sold to Syria by others," 11/23/2012)

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"MTN Irancell, a joint venture between MTN Group Ltd of South Africa and an Iranian government-controlled consortium, sourced equipment from Sun Microsystems Inc, Hewlett Packard Co and Cisco Systems Inc, the documents and interviews show. MTN owns 49% of the joint venture but provided the initial funding." (Reuters, "Iranian cell-phone carrier obtained banned U.S. tech," 6/4/2012)

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"Hewlett-Packard formed a partnership in 1997 with a newly formed company in Dubai to sell its products in the Middle East, including to Iran. It also sold services to the U.S. military while operating in Iran. In January 2009, after its sales in that country came under scrutiny, the company said it would cease all business in Iran to go "beyond the letter of the law."  From 2000-2009, the company has been the recipient of $17.6 billion US federal funds.  They have withdrawn their acitivites in Iran.  (The New York Times, "Profiting from Iran, and the US," 3/6/2010)

"Business records show one Iranian company, ABAN Commercial & Industrial Ltd., has contracted through an intermediary for more than 30,000 kilograms (about 66,000 pounds) of tungsten copper -- which can be used in missile guidance systems -- from Advanced Technology & Materials Co. Ltd. of Beijing. One March 2008 email between the firms mentions shipping 215 ingots, with more planned...

An Oct. 14, 2007, invoice says ABAN contracted for 30,900 kilograms of tungsten copper alloy from a firm in China in exchange for €2.1 million ($2.8 million). Additional orders were made in 2008, according to a March 27, 2008, email to ABAN from Advanced Technology & Materials Co. 'I was very happy talking to you on the phone,' an AT&M executive told an executive at ABAN in the email. "By now we had sent 215 pieces" of tungsten copper, he added."

ABAN didn't respond to requests for comment. Dan Hong, a lawyer for AT&M, said in an email that AT&M received warnings several months ago of allegations "that we have business dealings with Iran." But he said the firm has never heard of ABAN. "AT&M never signed any contracts with and exported to Iran" the specialized metal, he added. "We checked our business records carefully."

Records show AT&M supplied the tungsten copper to an intermediary firm called Liaoning Industry & Trade Co. Ltd. That firm couldn't be reached for comment. (The Wall Street Journal, "Fresh Clues of Iranian Nuclear Intrigue," 01/16/09)