Huawei gets a pass from White House probe, says report

PUBLISHED : Friday, 19 October, 2012, 12:00am
UPDATED : Friday, 19 October, 2012, 3:33am

Huawei Technologies, the world's second-largest supplier of telecommunications equipment, may have caught a break from the backlash of a congressional panel's report last week that branded it a security threat in the United States.

A White House-ordered review, which was completed early this year, "found no clear evidence" that Huawei had spied for China, according to Reuters yesterday, which cited two sources with knowledge of the 18-month probe. The largely classified investigation, which delved into the security risks posed by suppliers to US telecommunications network operators, found Huawei was risky for other reasons, such as having products that are vulnerable to hackers.

Huawei spokesman Scott Sykes declined to comment on the review, which he said the company is not familiar with. White House National Security Council spokeswoman Caitlin Hayden also did not comment.

Yet, the previously unreported finding may serve as welcome news to Shenzhen-based Huawei, which has been hammered by allegations that its networking equipment could be used by China for electronic espionage.

A report released last week by the US House of Representatives Intelligence Committee added heat to those accusations, which have also been levelled against Hong Kong-listed ZTE, the world's fifth-largest supplier of telecommunications gear.

The committee, which conducted an 11-month investigation into privately held Huawei and ZTE, found the two companies unco-operative in providing information about their respective ties with Beijing.

It recommended that they be excluded from public telecommunications projects and barred from buying US assets.

This report, however, did not present any conclusive evidence that either Huawei or ZTE had been caught spying for Beijing. China's Ministry of Commerce called the report "groundless" after Huawei and ZTE rejected its findings.

Canada responded to that report last week by invoking a National Security Exemption for developing a new public telecommunications network. That exemption allows the state to discriminate, without violating international trade obligations, against companies it considered risky to take part in such projects.

"The merits of all the various suspicions about Huawei are no longer so important. They exist," said Matt Walker, an analyst at market research firm Ovum. "Those will probably get stronger as China develops and comes into conflict more directly, economically and otherwise, with Western countries."