After report on Huawei's 'Trojan Horse,' Taiwan retains ban on China-made gear

After report claims Huawei projects are a 'Trojan Horse' in Taiwan, NCC maintains 5-year ban on Chinese-made telecom equipment

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(AP photo)

TAIPEI (Taiwan News) -- In response to a report by the National Interest referring to Huawei's products in Taiwan as a "Trojan Horse," the National Communications Commission (NCC) said that the Taiwanese government imposed a ban on 4G equipment from Chinese companies five years ago and it is still in place.

As news that Huawei's chief financial officer (CFO) was arrested in Canada on Thursday (Dec. 6), the National Interest on Friday (Dec. 7) published a report asserting that the Chinese tech giant's move into the Taiwan market is a "Trojan Horse."

In response to the report, NCC deputy chief Wong Po-tsung (翁柏宗) on Saturday (Dec. 8) said Taiwanese regulations have prohibited the use of Chinese-made equipment for five years, reported CNA. He pointed out that when it issued 4G licenses in 2013, Article 43 of the Regulations for Administration of Mobile Broadband Businesses (行動寬頻業務管理規則) stipulated, "When a competent authority decides on a system development plan, it shall cooperate with the national security considerations of the relevant authorities."

This means that the NCC will not allow the use of Chinese-made equipment when examining the licensing and building of a telecom operator's system, said Wong. Wong said that not only Huawei, but other Chinese companies would also be excluded from such a system to avoid the potential of any national security issues arising.

Wong said that the decision to exclude Chinese companies from the new 4G network was made based on national and information security considerations. Wong emphasized that the ban on Chinese-made equipment is still in place and that there is no need for the public to be concerned about security vulnerabilities in Taiwan's telecom equipment.

Canadian authorities on Thursday arrested the CFO of China's Huawei Technologies and daughter of the firm's founder, Meng Wanzhou, after the U.S. sought extradition for violating sanctions against Iran. The U.S. alleges that Huawei used a Hong Kong shell company, Skycom, to sell telecommunications equipment to Iran, in breech of U.S. sanctions.

Though Meng's arrest was officially due to her company's violations of sanctions against Iran, the incident also raised international concerns about whether the development of Huawei's 5G network poses national security risks. Yet, despite the fact that Huawei's founder Ren Zhengfei (Meng's father) started out as an engineer in the People's Liberation Army (PLA), and U.S. intelligence agencies earlier this year warned against buying Huawei's phones over security concerns, Taiwan seems to have failed to take significant steps to block the entry of such products into its market.

In fact, the National Interest report pointed out that Huawei was allowed to open its first flagship store in Taipei in April of this year. Huawei is also boldly displaying its brand as a prominent sponsor at the annual Christmasland light festival in New Taipei City Plaza.

Beyond its friendly facade, the company at its heart still has strong ties with the PLA and Ministry of State Security, and the state-owned China Mobile Communications Group is the company's largest shareholder. Huawei is working hand-in-hand with the Chinese Communist Party (CCP) in implementing its social credit system, which will monitor and rate many aspects of Chinese citizens' behavior, including their obedience toward the CCP. Those who score too low in the new surveillance system could have difficulty traveling, getting loans, finding jobs, and having their children attend universities.

The report quotes Kitsch Liao (廖彥棻), a Taiwan-based cybersecurity specialist at iThome Security, as saying that the backdoors Huawei installs pose a dual threat to communications in the form of espionage and sabotage.

Despite China's constant threats of invading Taiwan, Huawei was allowed to set up an office in Taiwan through its Hong Kong subsidiary in 2005. Though the branch was closed down 10 months later, in 2012, it was revealed that the core networks of Taiwan's telecom operators used Huawei equipment.

In 2013, the National Security Bureau (NSB) tried to shame the Taiwanese government into stopping the use of Huawei products by revealing that many government agencies, including the Ministry of Justice's Investigative Bureau and the President's Office, were using Huawei network cards in their mobile phones.

Liao said the NSB's efforts were "naïve" because a simple search including the words "Huawei" and "TW" in Shodan, a search engine used by hackers, shows that Taiwan is infested with Huawei equipment. Liao appealed to the government and contractors to strictly control personal devices, not to use Chinese-made products, have national security units quicken their pace, and publicize relevant information to raise the awareness among Taiwanese people.