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Germany to Pass Legislation to Conduct “Political Review” of Telecom Equipment Suppliers, Including Huawei

The cabinet of German Chancellor Merkel plans to pass a bill in the coming weeks, which will implement a two-stage approval process for telecommunications equipment suppliers. In addition to technical inspections of various telecommunications equipment components, the manufacturers’ “credibility” will also be under scrutiny.

According to the German newspaper Handelsblatt, the draft bill stated that the German Federal Office for Information Security (BSI) is responsible for the first stage, where the Chinese telecom giant Huawei will not have too many obstacles to overcome, but the threshold for the second stage of “political review” will be insurmountable. Suppliers must provide a detailed “credibility statement” and go through layers of review and approval processes from multiple government entities including the German Ministry of Foreign Affairs, the Ministry of the Interior, and the Ministry for Economic Affairs and Energy. Although the new bill does not directly ban Huawei, it will create obstacles to approval. The bill may also include the German intelligence community in the approval process for telecommunications equipment suppliers. Deutsche Welle stated that, in recent years, the Federal Intelligence Agency has repeatedly expressed its worries about Huawei’s participation in German communication networks.

Germany has always been one of Huawei’s main overseas markets. Huawei has entered into deals with Vodafone, Deutsche Telekom, and Telefónica Deutschland to provide radio access network (RAN) equipment, the so-called peripheral 5G equipment. However, the scope of approval under the draft bill is not limited to 5G core networks. In other words, if the bill takes effect, German telecom operators may be forced to remove Huawei’s peripheral equipment from the network.

The draft is expected to be discussed at the German federal cabinet meeting in November, and will then be submitted to Parliament for formal legislative procedures.

In an opinion piece, the Wall Street Journal said, “Huawei has longstanding ties to the People’s Liberation Army, and no Chinese company is independent under Communist Party rule.  … China is Germany’s largest trading partner, and Chinese state subsidies make Huawei equipment notably cheaper, but Merkel is finally moving as she faces opposition from across the German political spectrum and within her own party. The Chinese government may retaliate against German companies doing business in China, but that would only validate Berlin’s decision not to trust Beijing.”

Source: Voice of America, October 7, 2020