U.K. Doubles-Down on Criticism of Huawei's Flawed Systems
(Bloomberg) -- Chinese telecom equipment giant Huawei Technologies Co. has failed to improve its devices and software -- putting U.K. national security at risk, British officials have concluded.
The annual report by the Huawei Cyber Security Evaluation Centre Oversight Board into how the company conducts its U.K. operations is expected to criticize its failure to act on shortcomings outlined in last year’s report, according to a person familiar with its conclusions.
Continuing problems include flawed engineering systems and management of ageing component supplies which can no longer be supported by updated systems, according to the report, which is expected to be published in the first quarter of the year.
British officials are debating whether to manage Huawei through dialogue and oversight -- as they have for years -- or follow some allies and impose a ban on the use of its equipment for next-generation mobile networks.
Taking a softer approach could put the U.K. at odds with some of its closest security counterparts, including in the so-called Five Eyes network, the pan-national intelligence sharing network which comprises the U.S., Canada, Australia, New Zealand and the U.K.
Huawei faces bans in Japan, Australia, New Zealand and the U.S. over fears that China’s government could use its systems to spy on other countries. Federal authorities in Seattle are investigating the Chinese technology giant for allegedly stealing trade secrets from U.S. companies like T-Mobile US Inc., according to people familiar with the matter.
A spokesman for Huawei did not respond to a request for comment. The firm has always denied connections with the state and any espionage risks.
The critical report is unlikely to lead to a ban on Huawei and the authorities aren’t singling the company out because it’s Chinese, according to a British official, speaking on condition of anonymity. The official said all telecoms networks are liable to faults so the U.K. is seeking to manage and isolate risk. While the U.K. has already barred another Chinese telecoms provider, ZTE Corp., Culture Secretary Jeremy Wright has yet to rule on Huawei.
The Chinese company has a significant presence in the U.K. Huawei has signed contracts with all four U.K. mobile networks to test its 5G wireless equipment, deepening the Chinese vendor’s involvement in Britain’s telecom industry as officials weigh whether to ban the company over security concerns.
Tensions between the U.K. and Huawei reached a low in November when a senior security official walked out of a meeting with the company in frustration at its slow progress in improving its technology, according to a person with knowledge of the matter. In December the company pledged 2 billion pounds ($2.6 billion) to overhaul its systems to make them less susceptible to attack.
Pressure for the U.K. to clamp down on Huawei has been increasing. The U.K.’s Intelligence and Security Committee of lawmakers, which oversees the nation’s security agencies, visited Ottawa in September to speak to their counterparts from Canada and the U.S.
One lawmaker, who asked not to be named, said the U.S. and Canadian politicians told the British delegation of their “concern’’ about Chinese infiltration of key national infrastructure. In December Alex Younger, head of the U.K.’s foreign intelligence agency MI6, publicly questioned whether Huawei should be barred from running 5G telecom networks.
Two security sources suggested China’s spying capacity is so well advanced that dialogue and oversight could be Britain’s only options.
The National Cyber and Security Centre, part of the U.K.’s intelligence listening post GCHQ, has been monitoring the security of the company’s equipment at a dedicated testing site.
Known as the Huawei Cyber Security Evaluation Centre Oversight Board, it is made up of around 35 U.K.-security approved cyber experts based in Banbury, Oxfordshire, northwest of London. Funded by Huawei, it was established to provide insight for the British government into the company’s strategies and products.
Canada and China are feuding over the arrest of Huawei Chief Financial Officer Meng Wanzhou last month. Canada arrested Meng on the request of the U.S. which wants to extradite her on allegations of helping defraud banks to avoid sanctions on Iran. A Canadian man in China convicted of drugs trafficking had his sentence upgraded to the death penalty from a jail term, a move Canadian Prime Minister Justin Trudeau denounced.
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