China’s second-largest telecommunications equipment company has said it will “restrict…business development” in Iran following reports it had sold sophisticated monitoring technology to Tehran. Reuters news agency reported on March 22 that China’s ZTE had provided technology capable of monitoring land line, mobile phone, and Internet communications to Iran’s Telecommunication Company of Iran (TCI), despite tightening international sanctions against Tehran.

The monitoring system was part of a $131 million contract with TCI.

Some of the equipment provided by ZTE under a July 2011 invoice was produced by leading U.S. firms such as Microsoft, Hewlett-Packard, Oracle, and Dell, indicating that Tehran uses foreign companies to obtain goods restricted by U.S. sanctions.

The U.S. firms announced they were investigating the deal following the Reuters report.