Cisco Systems Inc. (CSCO), the largest maker of networking equipment has cut off its ties with ZTE Corp. (763) following allegations that Chinese company sold selling Cisco networking products to Iran in violation of U.S. sanctions against the country.
 
Bloomberg has quoted John Earnhardt, spokesman for San Jose, California-based Cisco as saying “Cisco has no current relationship with ZTE,”
 
ZTE, along with Huawei Technologies Co., provides opportunities for Chinese intelligence services to tamper with U.S. telecommunications networks for spying, according to a U.S. congressional report released today.
 
Reuters has quoted John Chambers, Cisco's chief executive as saying“Cisco doesn't "tolerate any direct or indirect" sales of its equipment to embargoed countries such as Iran. "And when that occurs, we step up and deal with it very firmly. So I think you can assume that you will not see that happen again."
 
There were reports that ZTE sold to an Iranian telecommunications company a surveillance system capable of monitoring landline, mobile and Internet communications.
 
ZTE said that it is discussing the issue with Cisco. “ZTE is highly concerned with the matter and is communicating with Cisco,” David Dai Shu, a spokesman for ZTE, said in an e-mailed statement.