The SEC's Office of Global Security Risk was also reacting to news reports in April 2012 that products of several U.S. companies, including HP, were sold by Chinese telecommunications equipment vendor ZTE to Iran to be allegedly included in systems used for surveillance and tracking activities. The SEC also referred to June 2012 news reports that HP equipment was acquired by MTN Irancell, possibly through Huawei Technologies, another Chinese telecommunications equipment vendor.
Iran, which is suspected by the U.S. of trying to build a nuclear bomb, also faces a variety of sanctions and exports controls from the U.S. government. ZTE was required under the terms of its contract with HP to comply with all applicable export laws and was specifically prohibited from selling HP's products into embargoed or sanctioned countries, Ritenour said.
The dealings of HP and some other U.S. tech companies with ZTE and Beijing 8-Star International, which was also a party to the Iranian contracts, have come under scrutiny by the U.S. Department of Commerce, according to reports. HP confirmed in the letter that it had been contacted by the BIS, and had provided it with information and documents.
Regarding the alleged sale of HP products to MTN Irancell, HP did not find, however, that it or its subsidiaries, distributors, resellers, retailers or other vendors were involved. If the alleged sale did occur, it was not authorized by the company, Ritenour wrote.
The company's dealings in Sudan, another country that faces U.S. sanctions and export controls, have also come under scrutiny. HP provides IT services for some non-U.S. companies that may have their own business activities within Sudan, but is "mindful of U.S. legal requirements and regulatory restrictions" when providing the services, Ritenour said. HP holds the same position with regard to providing IT services to companies with operations in Iran and Syria.
As HP's products are often distributed through indirect channels, it is always possible that products may be diverted to Iran, Syria, or Sudan after being sold to channel partners, such as distributors and resellers, without HP's knowledge or consent, Ritenour added.