Photo: Kin Cheung (AP)

The Central Intelligence Agency has accused Chinese tech giant Huawei of accepting funding from the “People’s Liberation Army, China’s National Security Commission and a third branch of the Chinese state intelligence network,” the Times of London reported on Saturday, citing a “UK source.”

According to the Times (non-paywalled version here), the CIA presented the evidence to other members of the “Five Eyes” (signatories to the joint signals, military, and human intelligence-sharing agreement between Australia, Canada, New Zealand, the U.S., and the UK) earlier this year. The Times wrote that the CIA “awarded a strong but not iron-cast classification of certainty” to its findings, adding that a separate U.S. government source affirmed that the feds believe the Chinese ministry of state security approved funding for Huawei.

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More details on the nature of the funding were not presented in the Times article. While the U.S. government has long insisted Huawei poses a national security threat, has banned federal agencies from using its technology, and has reportedly been pushing allies not to let the company build out their infrastructure for next-generation 5G wireless networks, it hasn’t presented hard evidence. In fact, the Wall Street Journal reported in January that U.S. officials do not believe they need to provide “proof” of espionage on the basis that China’s Communist government can simply order it to work with security services at any time. Some U.S. allies, particularly Germany, have seemed skeptical of the claims.

Huawei has also been in the news regarding the fate of its chief financial officer Meng Wanzhou, who has been detained in Canada for possible extradition to the U.S. over claims of violations of Iran sanctions and banking fraud. It’s also facing charges of theft of trade secrets from U.S. companies.

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Huawei has strongly contested allegations that it operates as an arm of the Chinese security and intelligence apparatus and instead characterized them as an attempt to strong-arm them out of the race to 5G, which many believe it is currently winning. Founder Ren Zhengfei has also issued denials, and some analysts believe the company has little incentive to spy because any exposure of such activity would be immensely damaging. A spokesman for the company told the Times, “Huawei does not comment on unsubstantiated allegations backed up by zero evidence from anonymous sources.”

“It is all the rage for western governments and media to call Chinese companies a ‘security threat’,” Chinese ambassador to the UK Liu Xiaoming said earlier this year, per the Times. “Such accusations are groundless and misleading. If left unchecked, they could disrupt market rules, poison business co-operation, and cause instabilities in the world economy.”

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Chief Ciaran Martin of the National Cyber Security Centre, which is part of the UK’s GCHQ intelligence agency, said earlier this year that he has not seen any evidence of spying. However, according to the Times, some UK officials believe the company will fare poorly during an upcoming review of the UK’s plans to build 5G networks:

The Whitehall review into plans for Britain’s introduction of 5G will be discussed by Theresa May, cabinet ministers and security chiefs at the next National Security Council, expected to be held next week. A Whitehall source said of the review: “I don’t think it’s massively supportive [towards Huawei].”

... A second Whitehall official said: “I think it’s very hard to justify the status quo … given all the head winds and concerns that have been expressed [about Huawei].”

The review is designed to “ensure that no one [telecoms] company becomes too powerful”, the insider said. It is understood that a range of outcomes have been examined in it regarding Huawei’s involvement in 5G, ranging from no action to an outright ban.

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According to the Times, “officials have privately admitted” that abandoning use of Huawei technology in favor of competitors like Ericsson or Nokia could delay 5G rollout for years, while a ban would require they strip existing Huawei technology from 4G infrastructure.

[The Times]

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