HP Accused of Illegal Exportation To Iran

AdamWeeden writes "According to research done by the Boston Globe, HP has been secretly using a third-party company to sell printers to Iran. This is illegal under a ban instituted in 1995 by then US President Bill Clinton. The third-party company, Redington Gulf, operates out of Dubai and previously stated on their web site that the company began in 1997 with 'a team of five people and the HP supplies as our first product, we started operations as the distributor for Iran,' though now the site has been changed to remove the mention of Iran. Has HP unknowingly been supplying Iran with technology or have they been trying to secretly get by the US government's export restrictions?"

Comments

HPSetup SSID

[Gizzmonic]

Nice to hear that another country has its entire WLAN infastructure polluted by "Hpsetup" SSIDs!

Unknowingly?

[geobeck]

Has HP unknowingly been supplying Iran with technology

Only if you put big finger-quotes around "unknowingly".

On the other hand, maybe this is a secret government plot to bankrupt Iran by selling them cheap printers, then gouging them on cartridges.

Re:Unknowingly?

[mabhatter654]

but a Chinese business partner don't give a damn about those rules. They run extra stuff all the time from the sweatshops, fake bags, shirts, cell phones, iPods, etc. If you make it in China, they counterfeit it. HP can take their cut for their "IP", it's not like HP actually MADE any of that stuff, or the Chinese will ship the product with empty logo spots anyway and HP gets nothing.

Enforcing an embargo against any country is like trying to enforce the US labor unions in all those other countries! US companies are just middlemen now, they don't MAKE anything.

Those commie bastards

[Murpster]

Selling product to people who want them is a slap in the face of our American free market system!! How dare they!

Re:Oh dear god

[Ethanol-fueled]

It's not the printer technology per se, it's the ban on crypto export. Them there printers can be used to print steganographic messages :)

Ixnay on the interpay

[Anonymous Coward]

shhhhhh.... it is a CIA ploy to bankrupt Iran via HP printer ink refills... would have gotten away with it too if it weren't for that meddling /.

Re:ummm ... printers?

[Anonymous Coward]

Why devalue the paper?

Re:Oh dear god

[huzur79]

For those to lazy to look up what he is talking about check this out http://en.wikipedia.org/wiki/Steganography#Usage_in_modern_printers I am amazed at the example shown in the wikipedia page.

Re:eh hum....

[fuzzyfuzzyfungus]

A small market is very much justifiable for sufficiently small values of "risk of getting caught" and "likely punishment". As it so happens, sufficiently small values seem to be the state of things. Frankly, I'm not sure why HP is the story here. Sure, they are almost definitely guilty of evading the spirit of the law, and quite possibly the letter; but HP's degenerate printers aren't really a big deal. The fact that a steady stream of oh, say, oil drilling and logistical equipment(including stuff with radioisotopes) has been getting transshipped for years seems much more interesting.

It is things like this that I find interesting about the behavior of our present administration(and, I'll note, some past ones, though they tended not to play the apocalyptic side nearly as hard). When it comes to talking about how dire the threat posed by Iran, or terrorists, or whoever it is, no description is too grandiose, no measure to severe or too costly. When it comes to actually doing something that might upset the corporate sponsors, though, all that is off. The west is supposed to be locked in some sort of existential struggle of civilizations, and you are telling me that we can't keep HP from selling printers to Iran, or get Bechtel to build barracks that don't electrocute our own people?

I suppose this shouldn't really surprise me, half of American "captains of industry" seem to have spent WWII goose-stepping; but the dissonance still throws me. People talk like this is a matter of total war; but regulate like it doesn't matter at all.

Re:Are IT embargoes even possible?

[Clandestine_Blaze]

So if HP quits selling to Iran, what's to stop them from buying from Turkey or England or India or Japan or China, and how could we ever pretend to know or that we could prevent it?

Absolutely nothing, and in fact, that is what already happens. Embargoes against Iran are impossible. During my last trip there, the shops were littered with pretty much the same consumer goods - both electronic and not - that you would find here in the States.

For goods produced by U.S. companies, there is always a middle-man involved. I am not 100% sure who, but from talking to several small-business owners over there, they get most of their U.S. produced goods through Italy. There is a big mark-up on hardware, however. You can expect to pay the equivalent of several hundred dollars more for a top-of-the-line graphics card by Nvidia, for instance.

I know you're not really discussing whether they are a good idea, but I can't help but share my two cents. The embargoes are about as retarded as the ones on Cuba are. The embargoes will never "punish" the Iranian government as they will always have enough wealth and power to get whatever they want from Dubai. The people who suffer are the citizens of Iran who actually LIKE the U.S. and want a friendly, normal relationship.

With the trade deficit being as high as it is, and with a huge market in Iran wanting U.S. made items, it really makes no sense to keep these restrictions, especially since they are getting it through third-parties anyway.

ink

[conspirator57]

i think Iran should be allowed to buy printers. Ink is more expensive than oil and with HP's / Lexmark's, etc. business model, I'd say making them buy ink to print is nearly an act of economic war more effective than the trade embargo itself.

[/humor]

PC LOAD LTR

[conspirator57]

PC load letter! FSCK!

Follow the money

[LenE]

Around 1998 I got hired by a company that manufactured medical lab equipment. Just before I started, they got a HUGE order from Iraq, which at the time, was under UN embargo and the scandal-ridden oil-for-food program.

The type and quantity of equipment that was ordered was ASTOUNDING, and sent alarm bells off through-out my organization. This was an enormous order, which amounted to about 70% of our typical annual production (world-wide) for the specific products. On top of that, there was a second order for spare parts to fully rebuild 2/3 of the original order. The equipment was specifically designed to grow bacterial and viral cultures on a very large scale for research. 60 Minutes had just done an investigative report on Saddam's chief biological weapons expert, who to most western news was only known as "Dr. Germ".

Our organization was struggling, and we really needed the revenue. To the workers on the floor, it meant that the lay-offs had stopped, for the moment.

I was dismayed that the organization was not in the position just reject the order on principle. Instead, they submitted the order to Clinton Administration's Commerce Department and set up a contingency plan to sell the equipment through multiple intermediary companies if permission was denied. Our CEO then made a large donation to the Democratic National Committee, and magically the sale was approved and blessed by the Commerce Department as "Humanitarian Medical Equipment", which it clearly was not.

Many can claim that no WMD's were found in Iraq, but I have a very good insight to the scale of the program that they had put in place. Almost all politicians have a price, and none are as pure as the wind-driven snow. Where there is money to be made, the barriers can be overcome.

One would think that HP's consumer goods could not be easily adapted to nefarious purposes (beyond counterfeiting), but you never know. Most laser printers do contain processors that are far beyond the capability allowed to pass through the embargo. Desperate people become very resourceful.

-- Len

Re:Follow the money

[LenE]

Just because you didn't see it on 24/7 cable news, doesn't mean that it didn't get found. A friend of mine was in the first wave of troops, and found a large WMD cache. The shells were in much better shape than those that were found later in the first month. That site was secured and there was no news of his find. While it does not make sense to the casual observer, not all discoveries are announced for political gain. I only found out about this because he was injured in a non-combat accident, and sent home.

The particular equipment I mentioned in my GP post looks quite innocuous and would probably be ignored by the first wave of troops, and likely looted for scrap by the Iraqis after Saddam's fall.

If you remember back to the Colin Powell UN Sec. Council presentation, we (the U.S,) were looking for mobil mass-production units. The equipment we sold was not for producing large amounts, but for the very large scale research effort required to identify successful strains of bacteria and viruses. Think millions of test tubes in a lab vs. large vats in a production process.

Without the research and strain isolation, the "weaponization" couldn't exist. There are thousands of labs all over the world that used our equipment to grow cultures. Iraq bought the equivalent of 70% of our annual production of our largest equipment, and plenty of accessories to keep all of them filled and productive. For some reason, I don't think that Iraq was trying to have a bacterial or viral space race to cure the common cold or to fight MRSA while dealing with crippling economic sanctions. The more likely use of this equipment was their acknowledged germ warfare program, especially given the massive amount of bacterial culture media used by this program.

-- Len

Re:eh hum....

[ElGanzoLoco]

I can't imagine that the Iran market is big enough to justify the risk of getting caught. But that's just me.

Yeah, that's just you. An oil-rich country with 70 million inhabitants, many of them middle-class, urbanized, literate, and under 30, is a gold mine.

Don't think Iran is anything like Afghanistan or Iraq. It is among the most developed countries in the Middle-East and Central Asia, and definitely the one with the best-educated population.

As a side note, finding common computing equipment and parts there is not a problem, and virtually everything imported to Iran either transits via Dubai or (more often than not) directly bought there to wholesale companies. The goods are then loaded on small wooden boats and shipped to Iran. Most of this trade escapes any sort of control (at least on the Dubai side of things).

In other words, the "US embargo on Iran" is a frigging joke, and a total waste of time.