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Updated Chinese telecoms kit maker Huawei narrowly avoided the wrath of US investigators last year after a business described by Reuters as a Huawei supplier* offered to sell American-made equipment to Iran in a deal that would have broken sanctions, it has emerged.

Tehran-based Soda Gostar Persian Vista was ready to sell 36 cell tower antennas to operator MTN Irancell before the error was spotted, according to a Reuters report. The existence of the intended transaction is recorded in a purchase order seen by Reuters.

South African MTN, which owns 49 per cent stake in the Iranian operator, told Reuters it had requested 36 antennas from a German manufacturer that was not subject to sanctions, but the order had been mistaken.

“This was later identified as an error and as a result the tender request was cancelled with Huawei and the German goods obtained from a local reseller," the firm added in a statement sent to the newswire.

US sanctions against Iran have been in place for several years but despite Huawei’s protests that it has not broken any laws in its continued trade with partners from the repressive state, it and its Shenzhen neighbour ZTE have come under increasing scrutiny.

In January, for example, US lawmakers called on the State Department to investigate claims it sold surveillance technology to Iran.

Then earlier this month, the damning House of Representatives Intelligence Committee report into Huawei and ZTE had this to say about the former:

Huawei failed to provide details of its operations in Iran, though it denied doing business with the government of Iran, and did not provide evidence to support its claims that it complies with all international sanctions or US export laws.

ZTE is already under investigation by the US on suspicion of breaking sanctions and then trying to cover up its actions when exposed by media reports.

Like Huawei, it announced it would not be seeking any new business in Iran, and has even sold off its ZTESec business, which flogged surveillance kit.

Cisco has already dropped ZTE as a partner as a result although cynics could argue this was more of a PR stunt for the US firm.®

*Update: Huawei has been in touch with El Reg since the publication of the article, and refutes Reuters' version of events. The company told The Register:

Huawei was never involved in the transactions or business mentioned in the article. The speculated connection between a cancelled PO and Huawei’s involvement led to the author’s misleading conclusion. In addition, Huawei has not done any business with Soda Gostar.

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