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The Government leaves in the air the veto to Huawei despite the offensive of the US and the EU

2023-06-01T05:12:14.265Z

Highlights: The 5G Cybersecurity Law has been parked and the Subdirectorate of Digital Integrity that had to prepare the list of prohibited manufacturers is vacant. On May 16, 2019, the Administration of the then president of the United States, Donald Trump, included Huawei in a list of entities that could pose a threat to national security. The European Union gave free rein to member States to take their own decisions. But in the wake of the Ukraine war, Brussels is pressuring countries to take action. The latest warning has come from Margrethe Vestager, vice-president of the European Commission responsible for digital affairs.


The 5G Cybersecurity Law has been parked and the Subdirectorate of Digital Integrity that had to prepare the list of prohibited manufacturers is vacant


On May 16, 2019, the Administration of the then president of the United States, Donald Trump, included Huawei in the list of entities that could pose a threat to national security, arguing that it was at the service of the Communist Party and could use its equipment and networks in espionage work in the service of the Chinese dictatorship. Consequently, Google withdrew permission for the electronic giant's mobiles to use its Android operating system and its applications (Gmail, Maps, Play Store or Facebook's WhatsApp, among many others), which caused a collapse in sales of the then largest seller of smartphones in the world. Other U.S. companies such as Intel and Qualcomm stopped supplying chips. Although the worst part came from the veto to 5G networks, calls to revolutionize new generation mobile telephony. Huawei was winning the race to European companies such as Ericsson or Nokia, but saw its networks banned in countries such as the United States, Canada or Japan.

In Europe, the ban on Huawei's 5G networks has not been so immediate. The European Union gave free rein to member States to take their own decisions. Sweden, Norway and the United Kingdom were the first to join the ban. But in the wake of the Ukraine war, Brussels is pressuring countries to take action. The latest warning has come from Margrethe Vestager, vice-president of the European Commission responsible for digital affairs, for lagging countries to put in place specific rules against these companies. The warning has resonated in countries such as Germany, where it has been leaked that it is about to veto the Chinese firm. And just this week, Portugal's High Council for Cyberspace Security has described as "high risk" the use of equipment and services in public 5G electronic communications networks from non-EU, NATO and OECD providers.

In Spain, the Government has preferred to leave in limbo that possible veto to Huawei and other Chinese firms such as ZTE. The first step was taken in March 2022, when the Council of Ministers approved the royal decree to set the rules to guarantee the security of 5G networks in which the possibility of expressly vetoing suppliers subject to the "power of a third State to exert pressure" or with "links with the governments of third countries" was cited. In principle, the deadline was going to be three months (until June 2022) for the Ministry of Economic Affairs to communicate to the telecommunications operators the list of prohibited companies. However, more than a year later it is still unknown if Huawei or the rest of Asian firms are suitable for the implementation of 5G in our country.

The latest initiative in this regard also leaves in the air any express ban on Chinese manufacturers. The Ministry of Economic Affairs took advantage of the restructuring of its organizational chart to create on March 28 a General Subdirectorate of Telecommunications Integrity, responsible for "promoting, processing and controlling compliance with the regulations governing the security of electronic communications networks and the provision of electronic communications services with 5G technology". However, two months later, Nadia Calviño's department has still not appointed any person in charge to occupy that subdirectorate.

Pending laws

But it is not the only sign that the matter is not in a hurry for the current Executive. The 5G Cybersecurity Bill, which was to include the famous list of banned manufacturers, will no longer be able to go ahead in 2023, especially after the call for general elections on July 23. The delay in this project joins that of the new Telecommunications Law. The unofficial position of the Ministry, but which has been expressed veiledly by its owner, Nadia Calviño, is that the matter is not urgent because telecommunications companies operating in Spain have already adopted adequate measures to protect themselves against possible threats.

"Companies are already integrating the principles that govern this Law into their decision-making, regardless of whether or not some type of decision or more detailed regulation is formally adopted in this regard," said the vice president on the occasion of the latest edition of the Mobile World Congress (MWC) in Barcelona held last February.

Indeed, in the absence of an official initiative, operators have been charged with preventively removing Huawei from their networks. Telefónica replaced the core (the central core of the network where intelligence and functions reside) that it had awarded to Huawei with one from Ericsson, the same Swedish provider that serves the Orange and MásMóvil networks. And Vodafone has just awarded theirs to Nokia.

But Spain, like the rest of the EU countries, must take into account the hardening of measures against Huawei that the current US president, Joe Biden, has undertaken. The White House is going to block all licenses that Huawei has for the export of US technology. The Administration has already informed the companies that had these licenses (AMD, Intel, Nvidia, Qualcomm, etc.) of the non-renewal of them. The technologies affected by these blockages are not only 5G but the current 4G, WiFi 6, artificial intelligence or the Cloud.

The economic consequences for Huawei have been disastrous. The Chinese tech giant posted a net profit of $5.200 billion in 2022, down 68.7 percent. The Spanish subsidiary suffered in 2021 a 75% drop in revenues from its consumer area – mainly mobile sales – from 406.4 million to 101 million euros, as well as a net profit of 19.9 million euros, 5.7% less than in 2020, according to the latest accounts notified in the Mercantile Registry. The company invoiced almost 720 million euros during 2021 in Spain, 26.3% less than the previous year.

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Source: elparis

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