Intel Corporation Alleged Of Violating U.S Sanctions On Terror Sponsoring Countries

Intel Corporation, which is one of the biggest and most successful manufacturer of computer processors and chips have been issued a ‘show cause notice’ by the United States Securities and Exchange Commission (SEC) for trading with countries such as Iran, Syria, Cuba and Sudan. The U.S State Department has classified these countries as sponsors of terrorism and after the 9/11 incident had imposed strict economic sanctions and furthermore, prohibited U.S firms to conduct business with these countries. SEC had sent a letter to Intel, marked confidential asking the company to provide any and all business transaction records for the business conducted with the banned countries.

The letter from the SEC to Intel Corp states,

“We are aware of a May 2008 news report that PCs in Cuba contain your Celeron processors. Cuba, Iran, Sudan, and Syria are identified by the State Department as state sponsors of terrorism, and are subject to U.S. economic sanctions and export controls. We note that your Form 10-K does not include disclosure regarding contacts with Cuba, Iran, Sudan, and Syria. Please describe to us the nature and extent of any past, current, and anticipated contacts with the referenced countries, whether through distributors, resellers, licensees, or other direct or indirect arrangements.”

According to the SEC, the computers that have been sold to Cuba are running on Intel Celeron processors, along with 80 GB hard disks, 512 MB RAMs and Microsoft XP Operating Systems. However, many argue that, such computer configurations can hardly be used to disrupt the national security of the United States of America or for that matter any developed nation.

Intel on the other hand has replied to the SEC, stating that, it does not engage in commercial activities with entities or countries that have been deemed as “sponsors of terrorism”. In its response to SEC, Intel stated,

“Intel has no business contacts with the Subject Countries, either directly or indirectly through tacit agreement with its customers. Intel prohibits all transactions with countries identified under certain trade related sanctions.”

According to Chuck Mulloy (Spokesman, Intel),