Chinese-owned telecommunications giant Huawei has been blocked from rolling out Australia's 5G network due to security concerns.
The Australian government said Thursday that the involvement of a company "likely to be subject to extrajudicial directions from a foreign government" presented too much risk. Several governments have been scrutinizing Huawei over its links to the Chinese government. The private Chinese company started by a former People's Liberation Army major in 1987 suffered a setback in the U.S. market in 2012 when a congressional report said it was a security risk and warned phone companies not to buy its equipment.
Locally here in Malta, government signed a Memorandum of Understanding with the telecommunications giant last July to cooperate on 5G with the possibility of a trial of the technology being introduced to Maltese businesses and citizens in October.
Speaking to The Malta Independent last July, a spokesperson for Parliamentary Secretary Silvio Schembri, who oversaw the signing of the MoU, said that "[they] cannot comment on other countries' approach to Huawei. The Company (Huawei) is a global leader in its field and operates in more than 170 countries worldwide including major European countries like the UK, Italy and Germany. We have no reason why Malta shouldn't do the same and benefit from the innovations they bring in ICT technology development," the spokesperson said.
The Associated Press reports that Huawei has said it would never hand over Australian customer data to Chinese spy agencies, but the Australian government's statement said no combination of security controls sufficiently mitigated the risk.
Acting Home Affairs Minister Scott Morrison said the government was committed to protecting 5G networks.
The decision also affects ZTE Corp, a Chinese maker of mobile devices.
Shenzhen-based Huawei, the world's largest telecommunications equipment supplier, had been banned from bidding for contracts for Australia's broadband network in 2011. 5G networks will start commercial services in Australia next year.
Huawei Australia tweeted that the decision was "extremely disappointing." Huawei Australia Chairman John Lord had said in June that rejecting one of the world's leading 5G suppliers could impact Australia's economic growth and productivity for generations.
The U.S. House Intelligence Committee previously found that Hauwei and ZTE, which is partly state-owned, were tied to the Chinese government and that both companies failed to provide responsive and detailed answers about those relationships and about their U.S. operations.
Huawei denied being financed to undertake research and development for the Chinese military, but the committee said it had received internal Huawei documents showing the company provided special network services to an entity alleged to be an elite cyber-warfare unit within the People's Liberation Army.
Lord at the time urged Australia not to be swayed by the U.S. report, which he said was about protectionism rather than security.