Huawei Halts Business in Iran Amid U.S. Scrutiny

Six lawmakers from states including Arizona, Rhode Island and Virginia asked the State Department to investigate whether Huawei Technologies violated the Comprehensive Iran Sanctions, Accountability and Divestment Act by supplying commercial communication materials to Iran that may have played a part in government censoring of information.

William Plummer, a Washington-based spokesman for Huawei, told Reuters "Huawei's business in Iran was limited to providing commercial-grade telecommunications equipment to commercial operators built to global standards in strict compliance with all international laws and regulations, as well as U.S. and other sanctions regimes".

Still, the Shenzhen, China-based manufacturer, which aims to increase its presence in the U.S. cell phone market, responded by promising not to seek new customers in Iran, and said it will limit the scope of its business with existing clients.

The scrutiny is nothing new for Huawei, which has struggled to build its brand in the U.S. amid rumors the company supplies controversial parties like the Chinese military with its products. Earlier this year, the company openly urged the U.S. to formally investigate its background in hopes of clearing up any misconceptions.

In November, however, Huawei became the focus of a U.S. House intelligence committee investigation amid concerns over foreign espionage performed via cyber-hacking.

Huawei denies any connection to suspicious entities, but repeated cyber attacks on U.S. government web sites by hackers with alleged ties to China continue to raise federal suspicion, and regulatory watchdog committees now routinely scrutinize foreign technology businesses.

If regulatory committees continue to publicly press Huawei for information, the company's reputation could suffer, possibly affecting its expansion plans into the U.S. market. The company's willingness to scale back business in Iran is a positive step in the interest of diplomacy, but may not be enough to satisfy the government.

In an increasingly tense political climate, technology companies walk a fine line trying to expand their business and adhering to the laws and regulations between many countries and governments.