South Korea’s Daelim Industrial Company has engaged in Iran’s energy sector while carrying out a contract for the US government, despite sanctions against the Middle Eastern country, according to a US government watchdog.

The Washington-based General Accountability Office (GAO) found that Daelim Industrial won a $1.5m contract to construct housing on a US military base in South Korea, while maintaining activities in the Islamic Republic.

“Of the seven firms we identified in December 2012, as having been reported to have engaged in commercial activity in Iran’s energy sector at some point between 1 June 2011 and September 2012, we found that one – Daelim Industrial – had US government contracts,” the GAO said in a report.

The GAO said it had not determined whether the actions the seven firms, based in China, India, South Korea and South Africa, were breaching sanctions under US law. This has to be determined by the secretary of state or secretary of treasury, it added.

Daelim Industrial has been carrying out an engineering, procurement and construction (EPC) package on state-owned National Iranian Oil Company’s (NIOC) liquefied natural gas (LNG) facilities in Tombak. It says the contract was awarded in 2007 before US sanctions were imposed. It has also been active on the South Pars gas field developments.

In the report’s second conclusion, the GAO did not identify any foreign firms that have “exported technologies to the Iranian government for monitoring, filtering or disrupting information and communication flows”.

The GAO cited a report by Washington-based non-government organisation Freedom House claiming that Tehran has upgraded its technology to block internet traffic, hack into international firms’ private information and establishing a national internet to tighten control over information.

The US has increasingly tightened sanctions against the Iran government in response to Tehran’s controversial nuclear programme. Representatives from Iran meet six leading world powers in Kazakhstan for renewed negotiations on its uranium enrichment activities.