EU executive to block Huawei from its contracts

The European Commission announced moves on Thursday to block the Chinese firms Huawei and ZTE from EU research funding and stop contracting operators using Chinese equipment.

The EU executive and member countries’ cybersecurity experts presented a report reviewing its 5G Security Toolbox, a 2020 plan endorsed by national governments to decrease the reliance on Chinese telecoms equipment makers.

Chinese suppliers Huawei and ZTE pose “materially higher risks than other 5G suppliers,” the Commission said in a statement. The Commission called out the two Chinese vendors by name — something it had previously avoided in official documents — and said European governments were right to impose blocks on the use of their equipment. 

So far, 24 EU countries “have adopted or are preparing legislative measures” to allow security services to block contracts with Huawei. Ten countries “have imposed such restrictions” and three countries “are currently working on the implementation of the relevant national legislation,” the Commission said.

But Internal Market Commissioner Thierry Breton told reporters in Brussels, “This is too slow and it poses a major security risk and expose[s] the union’s security. We cannot afford to maintain critical dependencies that could become a weapon against our interests.” 

Huawei’s persistent footprint in Europe has frustrated U.S. allies and comes at a time when the European Union is shoring up its own defenses against interference and trade friction with Beijing. But heavy-handed European action against Chinese 5G companies could also spark major trade tensions with Beijing.

The Commission also announced two moves to marshal its resources against the Chinese firms. First, it will “take measures to avoid exposure of its corporate communications to mobile networks using Huawei and ZTE as suppliers,” and apply this policy to “all Commission sites, including its main seats, its Representations and offices in all Member States,” it said.

That could impact contracts the Commission has with operators for telecommunication services for its staff. The Commission has a substantial presence in Belgium, where security services have already forced operators to move away from Huawei; Luxembourg, where the government has been more lenient on its use; and in other EU countries, where it has smaller-scale representations.

Secondly, and, more importantly, symbolically, is that the European Commission plans to apply its Huawei line to “all relevant EU funding programs and instruments.” 

“The Commission will restrict these suppliers from our own connectivity services and EU funding instruments,” Commission Executive Vice President Margrethe Vestager said.

Huawei did not immediately respond to a request for comment.

Despite massive pressure on Huawei and bans on the use of Chinese kit across the Western world, a series of European countries, most notably Germany, have been slow in imposing hard restrictions.

The fact that many countries haven’t acted yet “is creating strong vulnerabilities and a dependency for the Union as a whole,” the Commission said in its statement, arguing that networks are connected and countries also rely on each other when facing China in trade and political discussions. 

“I am hopeful that it will now be implemented very fast,” Breton said.