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Huawei Arrests in Poland Show How Trump Vs. China Tests Europe

Wojciech Moskwa, Angelina Rascouet and Maciej Martewicz
Huawei Arrests in Poland Show How Trump Vs. China Tests Europe

(Bloomberg) -- As Poland added to the global scrutiny of Huawei Technologies Co. on Friday with the arrest of a company employee and a local former security agent, the country’s authorities also exposed the division in Europe over policy toward the Chinese technology giant.

Huawei is facing increasing pressure across the European Union amid growing concerns that Beijing could use the company’s equipment for spying, something executives have denied. U.S. President Donald Trump’s administration has been pushing European allies to block Huawei from telecom networks amid a wider dispute over trade with China.

While there’s little to suggest any political motive, the Warsaw government is a staunch ally of the U.S. and the country is a prototype of Trump-style nationalism and protectionism. Poland relies on the EU for money, though counts on the Americans for security and U.S. troops are stationed on its soil.

The dilemma is that Europe needs to develop its infrastructure somehow. Various countries, including the U.K., France, Germany, Norway, have publicly raised concerns about using Huawei equipment for next-generation mobile networks. But others, like Spain, Portugal and Hungary, have been more welcoming to Chinese involvement.

“Europe is facing a challenge when it comes to dealing with Huawei and it shows that the continent doesn’t have the ability to be autonomous,” said Solange Ghernaouti, head of the Swiss Cybersecurity Advisory and Research Group. “Europe is either dependent on China or the U.S.”

Polish Custody

The Huawei employee detained in Poland is a Chinese citizen responsible for sales to public sector clients, television news channel TVPInfo said on Friday. The other detained person is a former high-ranking official at Poland’s Internal Security Agency who worked at mobile phone operator Orange Polska SA. They will remain in custody for three months.

Evidence shows that both men conducted espionage activities against Poland, Stanislaw Zaryn, a spokesman for Poland’s secret services chief, said in a statement. If convicted, they face up to 10 years in jail, Zaryn said. When he tweeted the arrests in English, he included hashtags for the U.S. Department of State, the FBI and CIA.

“For us, this specific investigation concerns two people,” he said later on Friday. “A separate issue is that of threats in the telecommunications industry. These are two separate issues.”

Poland’s cybersecurity chief, Karol Okonski, told RMF Radio that ideally the EU and NATO would be “as consistent as possible” on Huawei. He said the country is considering recommending caution toward the company, including potential exclusion from its IT market.

China is highly concerned over the issue, the press office at the Ministry of Foreign Affairs said. “We are asking the related country to deal with the case fairly based on laws” and protect the legitimate rights of the people, it said.

A Huawei representative said the company was looking into the matter and declined to comment further. The company said it abides by applicable laws wherever it operates and expects employees to do the same.

The Polish government named the two accused as Weijing W. and Piotr D., in line with local law prohibiting the publication of full names of those detained. Security services searched their homes and the offices of Huawei and Orange Polska, the Polish business of French mobile operator Orange SA. Orange spokesman Wojciech Jabczynski said the company handed over an employee’s belongings to the authorities.

The Chinese national is a former employee of the country’s consulate in the Baltic Sea port of Gdansk, according to TVPInfo television.

Western Suspicion

The accusations add to Huawei’s troubles of late as western governments grow worried that Huawei’s systems could be used by Chinese intelligence.

Australia and New Zealand banned Huawei equipment from the planned 5G networks of carriers in the countries and the head of British spy agency MI6 said last month the government needs to decide whether to ban the company.

Germany has said it’s considering restricting Huawei’s role in its future telecom infrastructure, while Czech President Milos Zeman said on Friday China is preparing an economically damaging reprisal against his country after authorities issued warnings about Huawei and risks it poses to security.

Huawei is also mired in a U.S. case alleging violations of trade sanctions. The U.S. alleges that its chief financial officer, Meng Wanzhou, conspired to defraud banks to unwittingly clear transactions linked to Iran. Meng was released on bail four weeks ago and is living under restrictions in her million-dollar Vancouver home.

The company has previously said it does not pose a security threat and that it’s never been asked by any government to build backdoors or interrupt any networks. It has said it would “never tolerate such behavior by any of our staff.”

“Huawei’s biggest challenge is to prove to its partners across the world that the quality of its cybersecurity services is second to none and that there’s no possibility of backdoor intrusion,” said Ghernatoui at the Swiss Cybersecurity Advisory and Research Group. “But they’ve failed to do that so far.”

--With assistance from Feifei Shen, Gao Yuan, Natalia Drozdiak, Andrea Dudik and Giles Turner.

To contact the reporters on this story: Wojciech Moskwa in Warsaw at wmoskwa@bloomberg.net;Angelina Rascouet in London at arascouet1@bloomberg.net;Maciej Martewicz in Warsaw at mmartewicz@bloomberg.net

To contact the editors responsible for this story: Rebecca Penty at rpenty@bloomberg.net, Rodney Jefferson

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