Huawei, sanctions and software: all you should know

Why is Huawei in the news?

Its chief financial officer, Meng Wanzhou, that’s and also daughter with the company’s founder, was arrested in Canada on 1 December and faces extradition towards US over allegations of helping evade sanctions against Iran. The Obama-era sanctions banned the sales of certain telephone-system equipment.

What does Huawei do?

It will be the world’s biggest telecoms equipment supplier, with 2017 revenues of 603bn yuan (67.7bn) and profits of 47.4bn yuan (5.3bn). One portion of it makes the whole networking equipment that creates phone masts work, the network switches that connect phone networks additionally, the software to operate them. Since 2015, there is outsold Ericsson and Nokia, its two main rivals, as well as being far bigger than ZTE (another Chinese company) or South Korea’s Samsung, that challenge for the reason that space. Additionally it is one of the world’s three largest smartphone vendors, vying with Apple for second place, so it has held within the past two quarters.

Where is its equipment used?

Its network tools are used everywhere you go C though not in america, which contains banned its 5G kit. Australia and New Zealand think about similar moves, decreeing that it cannot be utilized in 5G networks. In britain, BT uses Huawei systems extensively, though not rolling around in its central network.

Is the Meng arrest coupled to the US’s trade war with China?

No. The arrest definitely seems to be connected to the alleged sale of Huawei equipment in Iran, breaking US sanctions. American suspicions of sales being made via intermediary companies were raised in 2016, after documents from ZTE came to light. Those brought up an agency codenamed “F7” which, like ZTE, was selling equipment to sanctioned countries including Syria, North Korea, Cuba and Iran. Other details while in the documents denote “F7” being Huawei.

What does Huawei say about F7 and claims it broke sanctions?

Huawei says it “complies with all applicable legal guidelines where it operates, including applicable export control and sanction regulations in the UN, US and EU”.

Are sanctions truly the only bad news?

There are storm clouds elsewhere. In britain alone, BT is removing Huawei systems within the core with the mobile network EE, which it purchased in 2016. Plus the head of MI6, Alex Younger, said a couple weeks ago how the UK would need to decide “the extent to which we are going to be comfortable” with Chinese companies owning technologies like the forthcoming super-fast 5G networks. The issue that letting foreign companies install and in effect control infrastructure via software could make an anxiety attack possible during a period of heightened tension.

Have hostile infrastructure attacks ever happened?

In December 2015 Ukraine suffered a huge power outage affecting 230,000 people because of cyber-attack on its power stations, sown via targeted phishing emails that broke inside their computers; Russia may be blamed. In 2015 and 2016 state hackers employed by North Korea stole millions of dollars by entering banks’ systems in Bangladesh.

Why are countries so concerned?

The fear is the fact Huawei can have built-in a “backdoor” towards the network software (or could possibly be compelled to) that would allow covert surveillance or control C or perhaps destruction C of phone networks, which can be by their nature accessible via the internet. In case Huawei equipment had been, the only protection could be to the actual software that runs the network was secure.

How can you make sure its software package are secure?

Since 2010, within an arrangement with BT, Huawei has provided an office in Oxfordshire called “The Cell” where its code could be checked with a team including GCHQ experts. But recently The Cell is now looking for criticism as it is difficult to ensure that Huawei loads the exact same code for the machines it deploys elsewhere. “The code you audit might work OK, so how have you figured out that what’s evaluated is what leads to the BT network?” Professor Alan Woodward within the University of Surrey told the BBC the other day. The worst-case scenario was “espionage or disruption with a back door”, he added.

What does Huawei say about these concerns?

Huawei has repeatedly said such fears are overblown, who’s complies with local laws and that it won’t shell out user data to China. Its Australian chairman, John Lord, said your order to hand over user data towards the Chinese government could be “completely illegal” and fumed at Huawei being blocked with the 5G network, calling it “short-term and small-minded”.

This article was amended on 10 December 2018 to elucidate it’s banks who were hacked, not the Swift electronic banking system itself.