Most of the concerns surrounding Huawei relate to its perceived links to the Chinese State.The Committee noted the US House Permanent Select Committee on Intelligence (HPSCI)Investigative Report on the US National Security Issues Posed by Chinese Telecommunications Companies Huawei and ZTE published on 8 October 2012.
... Huawei strenuously denies that it has direct links with the Chinese Government or military, claiming that it receives no financial support from the Chinese Government and that it is 98.6% owned by its employees. Nevertheless, there is a lack of clarity about its financial structures. Moreover, Huawei’s denial of links to the Chinese State is surprising, given that such links to the State are considered normal in China.
... media analysis continues to suggest that despite its claims of employee ownership, appointments to the board remain tightly controlled.
The Intelligence and Security Committee recommended:
The BT/Huawei relationship began nearly ten years ago; the process for considering national security issues at that time was insufficiently robust. The Committee was shocked that officials chose not to inform, let alone consult, Ministers on such an issue. We are not convinced that there has been any improvement since then in terms of an effective procedure for considering foreign investment in the CNI. The difficulty of balancing economic competitiveness and national security seems to have resulted in stalemate. Given what is at stake, that is unacceptable.
- The National Security Council should ensure that there are effective procedures and powers in place, and clear lines of responsibility when it comes to investment in the CNI. Crucially, the Government must be clear about the sequence of events that led to Ministers being unsighted on an issue of national importance, and take immediate action to ensure that this cannot happen again.
More fundamentally, while we recognise that the Government does not expect the Cell to find every vulnerability, and that there are other mitigations in place, we remain concerned that a Huawei-run Cell is responsible for providing assurance about the security of Huawei products.