[Extensions of Remarks]
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From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

ARTICLE OF CHINESE TELECOM FIRM HUAWEI'S ROLE IN ENABLING IRAN'S STATE
SECURITY NETWORK

______

HON. FRANK R. WOLF

of virginia

in the house of representatives

Monday, November 14, 2011

Mr. WOLF. Mr. Speaker, I submit an October 27 Wall Street Journal
article that summarizes Chinese telecom firm Huawei's role in enabling
Iran's state security network. At the same time that the U.S. and its
allies are increasing efforts to support pro-democracy and human rights
activists, Huawei is empowering the Iranian regime to suppress these
groups.

[From the Wall Street Journal, Oct. 27, 2011]

Chinese Tech Giant Aids Iran

(By Steve Stecklow, Farnaz Fassihi and Loretta Chao)

When Western companies pulled back from Iran after the
government's bloody crackdown on its citizens two years ago,
a Chinese telecom giant filled the vacuum.
Huawei Technologies Co. now dominates Iran's government-
controlled mobile-phone industry. In doing so, it plays a
role in enabling Iran's state security network.
Huawei recently signed a contract to install equipment for
a system at Iran's largest mobile-phone operator that allows
police to track people based on the locations of their
cellphones, according to interviews with telecom employees
both in Iran and abroad, and corporate bidding documents
reviewed by The Wall Street Journal. It also has provided
support for similar services at Iran's second-largest mobile-
phone provider. Huawei notes that nearly all countries
require police access to cell networks, including the U.S.
Huawei's role in Iran demonstrates the ease with which
countries can obtain foreign technology that can be used to
stifle dissent through censorship or surveillance. Many of
the technologies Huawei supports in Iran--such as location
services--are available on Western networks as well. The
difference is that, in the hands of repressive regimes, it
can be a critical tool in helping to quash dissent.
Last year, Egyptian state security intercepted
conversations among pro-democracy activists over Skype using
a system provided by a British company. In Libya, agents
working for Moammar Gadhafi spied on emails and chat messages
using technology from a French firm. Unlike in Egypt and
Libya, where the governments this year were overthrown,
Iran's sophisticated spying network remains intact.
In Iran, three student activists described in interviews
being arrested shortly after turning on their phones. Iran's
government didn't respond to requests for comment.
Iran beefed up surveillance of its citizens after a
controversial 2009 election spawned the nation's broadest
antigovernment uprising in decades. Authorities launched a
major crackdown on personal freedom and dissent. More than
6,000 people have been arrested and hundreds remain in jail,
according to Iranian human-rights organizations.
This year Huawei made a pitch to Iranian government
officials to sell equipment for a mobile news service on
Iran's second-largest mobile-phone operator, MTN Irancell.
According to a person who attended the meeting, Huawei
representatives emphasized that, being from China, they had
expertise censoring the news.
The company won the contract and the operator rolled out
the service, according to this person. MTN Irancell made no
reference to censorship in its announcement about its
``mobile newspaper'' service. But Iran routinely censors the
Internet using sophisticated filtering technology. The
Journal reported in June that Iran was planning to create its
own domestic Internet to combat Western ideas, culture and
influence.
In winning Iranian contracts, Huawei has sometimes
partnered with Zaeim Electronic Industries Co., an Iranian
electronics firm whose website says its clients include the
intelligence and defense ministries, as well as the country's
elite special-forces unit, the Islamic Revolutionary Guards
Corps. This month the U.S. accused a branch of the
Revolutionary Guards of plotting to kill Saudi

[[Page E2033]]

Arabia's ambassador to the U.S. Iran denies the claim.
Huawei's chief spokesman, Ross Gan, said, ``It is our
corporate commitment to comply strictly with all U.N.
economic sanctions, Chinese regulations and applicable
national regulations on export control. We believe our
business operations in Iran fully meet all of these relevant
regulations.''
William Plummer, Huawei's vice president of external
affairs in Washington, said the company's location-based-
service offerings comply with ``global specifications'' that
require lawful-interception capabilities. ``What we're doing
in Iran is the same as what we're doing in any market,'' he
said. ``Our goal is to enrich people's lives through
communications.''
Huawei has about 1,000 employees in Iran, according to
people familiar with its Iran operations. In an interview in
China, a Huawei executive played down the company's
activities in Iran's mobile-phone industry, saying its
technicians only service Huawei equipment, primarily routers.
But a person familiar with Huawei's Mideast operations says
the company's role is considerably greater, and includes a
contract for ``managed services''--overseeing parts of the
network--at MTN Irancell, which is majority owned by the
government. During 2009's demonstrations, this person said,
Huawei carried out government orders on behalf of its client,
MTN Irancell, that MTN and other carriers had received to
suspend text messaging and block the Internet phone service,
Skype, which is popular among dissidents. Huawei's Mr.
Plummer disputed that the company blocked such services.
Huawei, one of the world's top makers of telecom equipment,
has been trying to expand in the U.S. It has met resistance
because of concerns it could be tied to the Chinese
government and military, which the company denies.
Last month the U.S. Commerce Department barred Huawei from
participating in the development of a national wireless
emergency network for police, fire and medical personnel
because of ``national security concerns.'' A Commerce
Department official declined to elaborate.
In February, Huawei withdrew its attempt to win U.S.
approval for acquiring assets and server technology from
3Leaf Systems Inc. of California, citing opposition by the
Committee on Foreign Investment in the United States. The
panel reviews U.S. acquisitions by foreign companies that may
have national-security implications. Last year, Sprint Nextel
Corp. excluded Huawei from a multibillion-dollar contract
because of national-security concerns in Washington,
according to people familiar with the matter.
Huawei has operated in Iran's telecommunications industry
since 1999, according to China's embassy in Tehran. Prior to
Iran's political unrest in 2009, Huawei was already a major
supplier to Iran's mobile-phone networks, along with Telefon
AB L.M. Ericsson and Nokia Siemens Networks, a joint venture
between Nokia Corp. and Siemens AG, according to MTN Irancell
documents.
Iran's telecom market, which generated an estimated $9.1
billion in revenue last year, has been growing significantly,
especially its mobile-phone business. As of last year, Iran
had about 66 million mobile-phone subscribers covering about
70% of the population, according to Pyramid Research in
Cambridge, Mass. In contrast, about 36% of Iranians had
fixed-line phones.
As a result, mobile phones provide Iran's police network
with far more opportunity for monitoring and tracking people.
Iranian human-rights organizations outside Iran say there are
dozens of documented cases in which dissidents were traced
and arrested through the government's ability to track the
location of their cellphones.
Many dissidents in Iran believe they are being tracked by
their cellphones. Abbas Hakimzadeh, a 27-year-old student
activist on a committee that published an article questioning
the actions of Iran's president, said he expected to be
arrested in late 2009 after several of his friends were
jailed. Worried he could be tracked by his mobile phone, he
says he turned it off, removed the battery and left Tehran to
hide at his father's house in the northeastern city of
Mashhad.
A month later, he turned his cellphone back on. Within 24
hours, he says, authorities arrested him at his father's
house. ``The interrogators were holding my phone records, SMS
and emails,'' he said.
He eventually was released and later fled to Turkey where
he is seeking asylum. In interviews with the Journal, two
other student activists who were arrested said they also
believe authorities found them in hiding via the location of
their cellphones.
In early 2009, Siemens disclosed that its joint venture
with Nokia, NSN, had provided Iran's largest telecom,
government-owned Telecommunications Company of Iran, with a
monitoring center capable of intercepting and recording voice
calls on its mobile networks. It wasn't capable of location
tracking. NSN also had provided network equipment to TCI's
mobile-phone operator, as well as MTN Irancell, that
permitted interception. Like most countries, Iran requires
phone networks to allow police to monitor conversations for
crime prevention.
NSN sold its global monitoring-center business in March
2009. The company says it hasn't sought new business in Iran
and has established a human-rights policy to reduce the
potential for abuse of its products.
A spokesman for Ericsson said it delivered ``standard''
equipment to Iranian telecom companies until 2008, which
included built-in lawful-interception capabilities.
``Products can be used in a way that was not the intention of
the manufacturer,'' the spokesman said. He said Ericsson
began decreasing its business in Iran as a result of the 2009
political upheaval and now doesn't seek any new contracts.
As NSN and Ericsson pulled back, Huawei's business grew. In
August 2009, two months after mass protests began, the
website of China's embassy in Tehran reprinted a local
article under the headline, ``Huawei Plans Takeover of Iran's
Telecom Market.'' The article said the company ``has gained
the trust and alliance of Major governmental and private
entities within a short period,'' and that its clients
included ``military industries.''
The same month the Chinese embassy posted the article,
Creativity Software, a British company that specializes in
``location-based services,'' announced it had won a contract
to supply a system to MTN Irancell. ``Creativity Software has
worked in partnership with Huawei, where they will provide
first and second level support to the operator,'' the company
said.
The announcement said the system would enable ``Home Zone
Billing''--which encourages people to use their cellphones at
home (and give up their land lines) by offering low rates--as
well as other consumer and business applications that track
user locations. In a description of the service, Creativity
Software says its technology also enables mobile-phone
operators to ``comply with lawful-intercept government
legislation,'' which gives police access to communications
and location information.
A former telecommunications engineer at MTN Irancell said
the company grew more interested in location-based services
during the antigovernment protests. He said a team from the
government's telecom-monitoring center routinely visited the
operator to verify the government had access to people's
location data. The engineer said location tracking has
expanded greatly since the system first was installed.
An official with Creativity Software confirmed that MTN
Irancell is a customer and said the company couldn't comment
because of ``contractual confidentiality.''
A spokesman for MTN Group Ltd., a South African company
that owns 49% of the Iranian operator, declined to answer
questions, writing in an email, ``The majority of MTN
Irancell is owned by the government of Iran.'' He referred
questions to the telecommunications regulator, which didn't
respond.
In 2008, the Iranian government began soliciting bids for
location-based services for the largest mobile operator,
TCI's Mobile Communication Co. of Iran, or MCCI. A copy of
the bidding requirements, reviewed by the Journal, says the
contractor ``shall support and deliver offline and real-time
lawful interception.'' It also states that for ``public
security,'' the service must allow ``tracking a specified
phone/subscriber on map.''
Ericsson participated in the early stages of the bidding
process, a spokesman said. Internal company documents
reviewed by the Journal show Ericsson was partnering with an
Estonian company, Reach-U, to provide a ``security solution''
that included ``Monitor Security--application for security
agencies for locating and tracking suspects.''
The Ericsson spokesman says its offering didn't meet the
operator's requirements so it dropped out. An executive with
Reach-U said, ``Yes, we made an offer but this ended
nowhere.''
One of the ultimate winners: Huawei. According to a Huawei
manager in Tehran, the company signed a contract this year to
provide equipment for location-based services to MCCI in the
south of Iran and is now ramping up hiring for the project.
One local Iranian company Huawei has done considerable
business with is Zaeim Electronic Industries. ``Zaeim is the
security and intelligence wing of every telecom bid,'' said
an engineer who worked on several projects with Zaeim inside
the telecom ministry. Internal Ericsson records show that
Zaeim was handling the ``security part'' of the lawful-
interception capabilities of the location-based services
contract for MCCI.
On its Persian-language website, Zaeim says it launched its
telecommunications division in 2000 in partnership with
Huawei, and that they have completed 46 telecommunications
projects together. It says they now are working on the
country's largest fiber-optic transfer network for Iran's
telecom ministry, which will enable simultaneous data, voice
and video services.
Zaeim's website lists clients including major government
branches such as the ministries of intelligence and defense.
Also listed are the Revolutionary Guard and the president's
office.
Mr. Gan, the Huawei spokesman, said: ``We provide Zaeim
with commercial public use products and services.'' Zaeim
didn't respond to requests for comment.

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