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“This functionality is offered by all major mobile and fixed network system vendors,” Mr. Roome said. “Such functionality can provide the proper authorities with an important tool for the investigation of serious criminal activities, such as terrorism, child pornography or drug trafficking. The use of such surveillance is based on local legislation and typically overseen by high-level independent government bodies, such as courts.”

Mr. Daly said, however, that the technical switches telecommunications companies embed in their systems can easily be abused.

“The concept of 'lawful intercept' came about with the development of cellular phones,” he said. “They had no way of monitoring them if it did not go through a landline switch. With [Global System for Mobile communications, or GSM], it is possible to communicate in the cell without going to the switch. This was part of the basic argument for why they developed it. But the real answer is that governments want to know what their people are doing.”

Tom Malinowski, Washington advocacy director for Human Rights Watch, said the monitoring center NSN sold to Iran last year should be regulated as though it were “dual-use technology” - items that can have military as well as civilian applications.

“There are a lot of export controls in place in Western countries on technology that might have a dual military purpose,” he said. “But there are virtually no restrictions on the export of high-tech equipment that can be used to monitor or control free expression.”

When Cisco Systems Inc., an American company, sold China technology to facilitate the state's ability to monitor the Web searches of its citizens, the Commerce Department had to review the export license to make sure Beijing was not obtaining technology it could use to repress Chinese citizens - a requirement for all U.S. exports to China following the 1989 crackdown at Tiananmen Square.

Mr. Roome said he did not consider the Iranian monitoring center to be dual-use technology. Indeed, NSN also provides telecommunications equipment to support the wireless telephone network used by Iranian citizens inside the country, he said.

“We believe that the connectivity we provide brings important benefits to societies through enabling the open sharing of information and enhancing economic prosperity,” he said. “We are concerned about human rights and the well-being of people across the globe and have therefore created very detailed ethical guidelines and code of conduct for our operations. These guidelines apply to our own operations and those of our business partners.

“We also recognize the legitimate authority of political decision makers in the global community to determine whether it is appropriate or not to do business in any particular country. We are strongly committed to the highest standards of ethical conduct, and operate in full compliance with all applicable national and international laws.”

The Iranian mission to the United Nations did not reply to requests for comment on the issue.

Iranian dissidents reacted with anger to the news about the sale.

Mohsen Sazegara, a founder of Iran's Revolutionary Guards who became a democracy advocate and was arrested in 2003 for his opposition to the Islamic republic, said there were rumors in Iranian opposition circles that the Germans had sold the state powerful new technology that would make their monitoring efforts more effective.

“My first reaction is, 'Wow! Why do they do this?' Don't they know that this will be used against the people of Iran?” said Mr. Sazegara, who now lives in the United States.

“They facilitate a regime which easily violates human rights in Iran and the privacy of the people of Iran. They have facilitated the regime with a high technology that allows them to monitor every student activist, every women's rights activist, every labor activist and every ordinary person.”

Hadi Ghaemi, spokesman for the International Campaign for Human Rights in Iran, said 12 women´s rights activists were arrested late last month at a private meeting to celebrate the Persian New Year. He said the raid suggested the state had access to private communications.

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