At Gathering of Spy Chiefs, U.S., Allies Agreed to Contain Huawei

By Rob Taylor

Spy chiefs from the West’s most powerful intelligence alliance agreed in a July meeting in Canada they needed to contain Huawei Technologies Co., according to people familiar with the matter, punctuating years of worry about the Chinese maker of telecommunications equipment.

Soon afterward, in an unprecedented campaign, some of the chiefs began to speak out publicly about the risks associated with Chinese-made gear, especially to next-generation 5G mobile networks now starting to be rolled out world-wide.

The meeting in Canada drew together spy chiefs from the “Five Eyes” intelligence-sharing network, made up of English-speaking allies Australia, Canada, New Zealand, the U.K. and the U.S. Central Intelligence Agency Director Gina Haspel attended, according to these people.

Discussions touched on concerns about China’s cyber espionage capabilities and growing military expansion, people familiar with the meeting said. One focus was how to protect telecommunications networks from outside interference, according to one person familiar with the discussion.

Five Eyes members have long had differing levels of concern over Huawei and other Chinese equipment makers. They have also differed sharply in their tolerance for Huawei, in particular, as a supplier to their national telecommunication carriers. The U.S. has all but banned Huawei gear, while U.K. carriers have been big customers. Reflecting that divide, a person familiar with the meeting said participants agreed that an outright ban in many countries was impractical.

“The five countries are not all exactly alike in their views and willingness to speak out, but they all see the same threat,” said one of the people familiar with the meeting.

Huawei says it is employee-owned and not beholden to Beijing or any government. It says its equipment poses no more threat than any other supplier, because of the industry’s reliance on common suppliers with major Chinese operations. It declined to comment for this article. The Chinese government has said it “strongly opposes” accusations that Huawei poses national security threats.

The detention of two Canadian citizens in China and unexpected comments from President Trump have magnified the political stakes of the case involving Huawei executive Meng Wanzhou, who was released on bail earlier this week. Photo: The Canadian Press via AP

The potential difficulties in confronting Huawei have been highlighted in recent weeks as China detained a former Canadian diplomat, Michael Kovrig after Canada arrested Huawei executive Meng Wanzhou and detained her on a U.S. extradition request in connection with alleged violations of Iran sanctions.

After the meeting in Canada, first reported by The Australian Financial Review, some of the typically reticent intelligence officials who were there made unusual public comments about what they saw as a growing threat posed by Huawei.

Australian Signals Directorate Director-General Mike Burgess warned in October that entire transport and utility grids could be crippled if 5G—the new mobile network technology that promises ultra-fast connections—were compromised.

The head of the British Secret Intelligence Service, or MI6, Alex Younger said earlier this month the government needed to decide how comfortable it was with allowing Huawei to supply a 5G mobile network in the U.K.

A day later, Canadian Security Intelligence Service head David Vigneault told a business audience the agency had observed increased state-sponsored espionage in fields such as 5G, though he didn’t cite any specific states.

Officials haven’t publicly said whether their fears are based on theoretical vulnerabilities, or specific issues with hardware or software that has caused alarm. The U.K. has said it identified unspecified “shortcomings” in Huawei’s engineering processes, that exposed new risks to the country’s telecommunication networks. It has asked Huawei to fix those failings.

Publicly, U.S. officials have said their biggest worry is that Beijing could compel Huawei to use its knowledge of its equipment to spy on or sabotage foreign telecommunications networks.

The U.S. has warned allies and foreign telecommunications companies to stay clear of Chinese telecom suppliers like Huawei, though some have pushed back. The U.S. has been pressuring German authorities for months to drop Huawei, according to people familiar with the matter, but the Germans have asked for more specific evidence to demonstrate the security threat.

German authorities and telecom executives have yet to turn up any evidence of security problems with Chinese equipment vendors, according to a person familiar with the matter. In February, executives at one German telecom carrier notified two German federal offices that it was in receipt of a warning message from U.S. authorities regarding Chinese equipment, according to a person familiar with the matter. Those offices, the Federal Office for Information Security and the domestic intelligence service, responded that “there is currently no reliable knowledge” regarding such concerns about the Chinese vendors.

On Friday, Deutsche Telekom AG said it was reviewing its procurement strategy for vendor equipment given “the global discussion about the security of network elements from Chinese manufacturers.” The Bonn-based carrier, which uses network components from Huawei as well as Ericsson AB, Nokia Corp. and Cisco Systems Inc., is preparing for Germany’s 5G spectrum auction expected in the spring.

Australia has been moving more aggressively. The government blocked Huawei equipment from 5G mobile networks and fiber roll outs. New Zealand followed in late November with intelligence officials blocking cellphone company Spark from using Huawei equipment in s 5G roll out, citing “significant national security risks.” Britain’s BT Group PLC said last week that it would remove Huawei equipment from the core of its existing 4G mobile network as part of a long-planned upgrade.

Executives of one British carrier said that government authorities have assured them they will not be required to remove and replace existing Huawei equipment. Discussions with British officials center on whether the government should allow Huawei to be used in only 5G cellular-antenna equipment, which the carrier says presents only a small security risk.

The U.S. has been concerned about Huawei since at least 2007, when national-security officials reviewed and eventually blocked the company’s bid to acquire an American tech company. Australia and New Zealand have worried about the potential threat posed by Huawei equipment since 2010, according to officials. Australia banned Huawei in 2012 from contracts for a new multibillion-dollar national fiber broadband network.

In 2012, as part of their formal investigation of Huawei, members of the U.S. House Intelligence Committee spoke to Australian and British intelligence officials about the risks of using the company’s equipment, said Rep. Dutch Ruppersberger of Maryland, then the committee’s ranking Democrat. The Australians were especially wary.

“They didn’t want any part of Huawei,” Mr. Ruppersberger said in an interview. “They didn’t want to expose their country and take that risk.”