The world is watching: America plays poisonous politics

Important Takeaways:

  • Why the World Is Betting Against American Democracy
  • Ambassadors to Washington warn that the GOP-Democratic divide is endangering America’s national security.
  • When I [Nahal Toosi] asked the European ambassador to talk to me about America’s deepening partisan divide, I expected a polite brushoff at best. Foreign diplomats are usually loath to discuss domestic U.S. politics.
  • Instead, the ambassador unloaded for an hour, warning that America’s poisonous politics are hurting its security, its economy, its friends and its standing as a pillar of democracy and global stability.
  • The U.S. is a “fat buffalo trying to take a nap” as hungry wolves approach, the envoy mused. “I can hear those Champagne bottle corks popping in Moscow — like it’s Christmas every [blank] day.”
  • For example, one former Arab ambassador who was posted in the U.S. during both Republican and Democratic administrations told me American politics have become so unhealthy that he’d turn down a chance to return.
  • “I don’t know if in the coming years people will be looking at the United States as a model for democracy,” a second Arab diplomat warned.
  • Donald Trump’s name came up in my conversations, but not as often as you’d think.
  • The diplomats focused much of their alarm on the U.S. debate over military aid to Ukraine
  • In particular, they criticized the decision to connect the issue of Ukrainian aid and Israeli aid to U.S. border security. Not only did the move tangle a foreign policy issue with a largely domestic one, but border security and immigration also are topics about which the partisan fever runs unusually high, making it harder to get a deal. Immigration issues in particular are a problem many U.S. lawmakers have little incentive to actually solve because it robs them of a rallying cry on the campaign trail.
  • So now, “Ukraine might not get aid, Israel might not get aid, because of pure polarization politics”

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Former U.S. Officials held secret talks with Russians about ending war

Secret talks with Russia

Revelations 6:3-4 “when he opened the second seal, I heard the second living creature say, “Come!” 4 And out came another horse, bright red. Its rider was permitted to take peace from the earth, so that people should slay one another, and he was given a great sword.

Important Takeaways:

  • A group of former senior U.S. national security officials have held secret talks with prominent Russians believed to be close to the Kremlin — and, in at least one case, with the country’s top diplomat — with the aim of laying the groundwork for potential negotiations to end the war in Ukraine
  • In a high-level example of the back-channel diplomacy taking place behind the scenes, Russian Foreign Minister Sergey Lavrov met with members of the group for several hours in April in New York, four former officials and two current officials told NBC News.
  • Among the goals, they said, is to keep channels of communication with Russia open where possible and to feel out where there might be room for future negotiation, compromise and diplomacy over ending the war.
  • The talks come amid mounting signs that the U.S. and its allies are eager to see Moscow and Kyiv move toward peace talks in the fall, after the completion of Ukraine’s ongoing counteroffensive.

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U.S. puts Chinese firms helping military on trade blacklist

WASHINGTON (Reuters) -The U.S. Commerce Department put a dozen Chinese companies on its trade blacklist on Wednesday citing national security concerns and in some cases their help with the Chinese military’s quantum computing efforts.

The department also said 16 entities and individuals from China and Pakistan were added to the blacklist for contributing to Pakistan’s nuclear activities or ballistic missile program.

In total, 27 new entities were added to the list from China, Japan, Pakistan, and Singapore.

Commerce Secretary Gina Raimondo said in a statement that the move will help prevent U.S. technology from supporting the development of Chinese and Russian “military advancement and activities of non-proliferation concern like Pakistan’s unsafeguarded nuclear activities or ballistic missile program.”

The Commerce Department said Hangzhou Zhongke Microelectronics Co. Ltd., Hunan Goke Microelectronics, New H3C Semiconductor Technologies Co. Ltd., Xi’an Aerospace Huaxun Technology, and Yunchip Microelectronics were placed on the Commerce Department’s entity list for their “support of the military modernization of the People’s Liberation Army.”

It also added Hefei National Laboratory for Physical Sciences at Microscale, QuantumCTek, and Shanghai QuantumCTeck Co. Ltd. to the list for “acquiring and attempting to acquire U.S.-origin items in support of military applications.”

Suppliers to these companies will need to apply for a license before selling to them, which is likely to be denied.

(Reporting by Chris Sanders and Karen Freifeld; Editing by Chizu Nomiyama and David Clarke)

Islamic State in Afghanistan could be able to attack U.S. in 6 months-Pentagon official

WASHINGTON (Reuters) -The U.S. intelligence community has assessed that Islamic State in Afghanistan could have the capability to attack the United States in as little as six months, and has the intention to do so, a senior Pentagon official told Congress on Tuesday.

The remarks by Colin Kahl, under secretary of defense for policy, are the latest reminder that Afghanistan could still pose serious national security concerns for the United States even after it ended its two-decade-old war in defeat in August.

The Taliban, which won the war, are enemies of Islamic State and have seen its attempts to impose law and order after the U.S. pullout thwarted by suicide bombings and other attacks claimed by Islamic State.

They include bombings targeting the minority Shi’ite sect and even an Islamic State beheading of a member of a Taliban militia force in the eastern city of Jalalabad.

In testimony before the Senate Armed Services Committee, Kahl said it was still unclear whether the Taliban has the ability to fight Islamic State effectively following the U.S. withdrawal in August. The United States fought the Taliban as well as striking groups like Islamic State and al Qaeda.

“It is our assessment that the Taliban and ISIS-K are mortal enemies. So the Taliban is highly motivated to go after ISIS-K. Their ability to do so, I think, is to be determined,” Kahl said, using an acronym for Islamic State in Afghanistan.

Kahl estimated Islamic State had a “cadre of a few thousand” fighters. Acting Foreign Minister Amir Khan Muttaqi of the new Taliban government has said the threat from Islamic State militants will be addressed. He also said Afghanistan would not become a base for attacks on other countries.

Kahl suggested al Qaeda in Afghanistan posed a more complex problem, given its ties to the Taliban. It was those ties that triggered the U.S. military intervention in Afghanistan in 2001 following al Qaeda’s Sept. 11 attacks on New York and Washington. The Taliban had harbored al Qaeda leaders.

Kahl said it could take al Qaeda “a year or two” to regenerate the capability to carry out attacks outside of Afghanistan against the United States.

Democratic President Joe Biden, whose supervision of the chaotic end to the war last summer has damaged his approval ratings, has said the United States will continue to be vigilant against threats emanating from Afghanistan by carrying out intelligence-gathering operations in the country that would identify threats from groups like al Qaeda and Islamic State.

Kahl said the goal was to disrupt those groups so that Islamic State and al Qaeda don’t become capable of striking the United States.

“We need to be vigilant in disrupting that,” he said.

Still, U.S. officials privately warn that identifying and disrupting groups like al Qaeda and Islamic State is extremely difficult without any troops in the country. Drones capable of striking Islamic State and al Qaeda targets are being flown in from the Gulf.

Kahl said the United States did not yet have any agreement with countries neighboring Afghanistan to host troops for counterterrorism efforts.

(Reporting by Phil Stewart and Idrees Ali; editing by Jonathan Oatis)

UK should be concerned at Chinese gene data harvesting, lawmaker says

By Alistair Smout

LONDON (Reuters) -Britain should be concerned about the harvesting of genetic data from millions of women by a Chinese company through prenatal tests, a senior British lawmaker told Reuters.

A Reuters review of scientific papers and company statements found that BGI Group developed the tests in collaboration with the Chinese military and is using them to collect genetic data around the world for research on the traits of populations.

“I’m always concerned when data leaves the United Kingdom, that it should be treated with the respect and privacy that we would expect here at home, and the concern that this raises is that it may not be so,” Tom Tugendhat, chairman of the British parliament’s Foreign Affairs Select Committee, told Reuters.

“The connections between Chinese genomics firms and the Chinese military do not align with what we would normally expect in the United Kingdom or indeed many other countries.”

The privacy policy on the website for the Non-Invasive Prenatal Test (NIPT), sold under the brand name NIFTY in Britain, says data collected can be shared when it is “directly relevant to national security or national defense security” in China.

BGI says it has never shared data for national security purposes and has never been asked to.

The company said that it fully complied with European GDPR data protection rules and also had the British certification for personal information management.

“BGI’s NIPT test was developed solely by BGI – not in partnership with China’s military. All NIPT data collected overseas are stored in BGI’s labs in Hong Kong and are destroyed after five years,” it said in an email to Reuters, adding that it took data protection, privacy and ethics extremely seriously.

Tugendhat is one of nine British lawmakers who has been sanctioned by China for highlighting alleged human rights abuses in Xinjiang, which Beijing describes as “lies and disinformation.”

He co-leads the China Research Group, a group of Conservative lawmakers which looks to rebalance the strategic relationship with China.

He said that any British companies using the tests should be clear where the data is going, who holds it, and what access others, including other governments, would have to it.

“Unless a company has done that, I think it’s perfectly reasonable for British people to be extremely concerned with these connections,” he said.

(Reporting by Alistair Smout in London, additional reporting by Kirsty Needham in Sydney; Editing by Kate Holton and Pravin Char)

Mexico vows purge after ex-defense chief arrested in U.S.

By Diego Oré and Frank Jack Daniel

MEXICO CITY (Reuters) – Mexico’s president on Friday promised to clean up the armed forces but backed its current leadership after the arrest of a former defense minister on U.S drug charges, which he called evidence some of his predecessors were “mafiosi.”

The stunning detention in Los Angeles of Salvador Cienfuegos, defense minister until 2018, took Mexico’s security establishment by surprise, senior federal sources said. U.S. authorities did not warn their counterparts of the operation.

The fall of Cienfuegos marks the first time a former defense minister has been arrested, and will have far reaching implications for Mexico’s drug war, which has been led by the armed forces for more than a decade.

President Andres Manuel Lopez Obrador pledged to suspend anyone inside his government implicated in the charges

“We won’t cover up for anybody,” he said, before voicing fulsome support for Cienfuegos’ successor at the head of the army and his counterpart in the navy, noting that he had personally vetted them for honesty.

Under Lopez Obrador, the armed forces have taken on more responsibility, including establishing a militarized national police force, overseeing port security and working on infrastructure projects.

The arrest comes less than three weeks before the U.S. presidential election. President Donald Trump, seeking a second term, has made clamping down on drug cartels a priority, though without major progress since he took office in 2017.

Some Mexican officials were privately shocked at the detention of Cienfuegos in Los Angeles airport, worrying it was an unprecedented U.S. intervention against a symbol of Mexican national security.

“It was totally unexpected, I never saw this coming, never, never,” said a senior police source.

Lopez Obrador quickly incorporated the arrest into his narrative that predecessors had presided over a debilitating increase in corruption in Mexico, which for years has been convulsed by often horrific levels of drug gang violence.

“If we’re not talking about a narco state, one can certainly talk about a narco government, and without doubt, about a government of mafiosi,” Lopez Obrador said.

“We’re cleaning up, purifying public life.”

‘WE’RE CLEANING UP’

Mexican Foreign Minister Marcelo Ebrard said he had received word from the Mexican consulate in Los Angeles that Cienfuegos, 72, was facing five counts of drug charges and would be transferred from Los Angeles to New York. Sources earlier told Reuters that one of the charges related to money laundering.

Lopez Obrador said he only heard about the arrest after the event, though he noted that Mexico’s ambassador to the United States, Martha Barcena, had informed him about two weeks ago that there was talk of an investigation involving Cienfuegos.

There had been no open probe in Mexico on Cienfuegos and his arrest was linked to the case against Genaro Garcia Luna, Mexico’s security minister from 2006-2012, who Lopez Obrador said.

Garcia Luna is on trial in New York charged with accepting millions of dollars in bribes from captured kingpin Joaquin “El Chapo” Guzman’s Sinaloa Cartel, which he was meant to fight.

Like Garcia Luna, Cienfuegos had been a major figure in Mexico’s drug war, which has claimed hundreds of thousands of lives over the past two decades.

Under Cienfuegos, the army was accused of extrajudicial killings, including the June 2014 Tlatlaya massacre in central Mexico, where 22 drug gang members were shot dead.

A tall, imposing man, Cienfuegos fought to shield the army from potentially embarrassing investigations.

They included the kidnapping and suspected massacre of 43 student teachers in September 2014 in the city of Iguala by drug gang members in cahoots with corrupt police. Last month arrest warrants were issued in Mexico for soldiers linked to the case.

Mexico’s armed forces are generally perceived as less prone to corruption than the police. However, that image has been gradually corroded since former president Felipe Calderon first sent in the military to fight the gangs at the end of 2006.

(Reporting by Dave Graham, Diego Oré, Frank Jack Daniel and Lizbeth Diaz; Writing by Dave Graham; Editing by Andrew Cawthorne and Tom Brown)

Senate committee to vote on bill banning federal employees from using TikTok

By Nandita Bose

WASHINGTON (Reuters) – A U.S. Senate committee is likely to vote next week on a bill from Republican Senator Josh Hawley that would ban federal employees from using social media app TikTok on government-issued devices.

The Senate Homeland Security and Governmental Affairs Committee will take up the “No TikTok on Government Devices Act” at its hearing on July 22.

TikTok’s Chinese ownership and wide popularity among American teens have brought scrutiny from U.S. regulators and lawmakers.

TikTok, owned by China’s ByteDance, is known for its ability to create short videos. The company last year said that about 60% of its 26.5 million monthly active users in the U.S. are aged 16 to 24.

One of the company’s harshest critic, Hawley has repeatedly raised national security concerns over TikTok’s handling of user data and said he was worried that the company shares data with the Chinese government.

“For federal employees it really is a no-brainer. It’s a major security risk. … Do we really want Beijing having geo-location data of all federal employees? Do we really want them having their keystrokes?” Hawley told reporters in March when he announced the introduction of the bill.

Several U.S. agencies that deal with national security and intelligence issues have banned employees from using the app, which allows users to create short videos.

Recently, Secretary of State Mike Pompeo said the United States is looking at banning Chinese social media apps, including TikTok, suggesting it shared information with the Chinese government. He said Americans should be cautious in using the app.

TikTok in the past has told Reuters it has never provided user data to China. It did not immediately respond to a request for comment.

Under a law introduced in 2017 under Chinese President Xi Jinping, Chinese companies have an obligation to support and cooperate in China’s national intelligence work.

(Reporting by Nandita Bose in Washington; Editing by Leslie Adler)

U.S. attorney general highlights ‘new threat’ to security from drones

By David Shepardson

WASHINGTON (Reuters) – U.S. Attorney General William Barr on Monday issued guidance to Justice Department agencies on the use of protective measures against drones, including the destruction of any that pose a threat to national security.

Congress in 2018 gave the Justice and Homeland Security departments new powers to disable or destroy any threatening drones, which can compete with satellites as modern day spies in the sky, after officials raised concerns about their use as weapons.

The United States ranks among the world leaders in drone warfare after employing the technology widely in countries including Afghanistan.

Barr, in a statement, said the guidelines issued Monday “will ensure that we are positioned for the future to address this new threat, and that we approach our counter-drone efforts responsibly, with full respect for the Constitution, privacy, and the safety of the national airspace.”

The guidance says the FBI, Drug Enforcement Agency, Bureau of Prisons and other Justice Department agencies can intercept communications from a threatening drone or destroy it without prior consent. It also details how agencies “may seek approval for the use of counter-drone technologies and request designation of facilities or assets for protection.”

Justice Department agencies under certain circumstances may maintain records of communications intercepted from drones for up 180 days, the guidance says.

In a reference to the downing, destruction or disabling of any threatening drones, the guidance says agencies must work with the Federal Aviation Administration and conduct a risk-based assessment to examine the impact of operations on the national airspace. That “includes potential effects on manned and unmanned aircraft, aviation safety, airport operations and infrastructure, and air navigation services.”

Agencies, the guidance adds, “should consider and be sensitive at all times to the potential impact protective measures may have on legitimate activity by unmanned aircraft and unmanned aircraft systems, including systems operated by the press.”

More than 1.5 million drones have been registered with the Federal Aviation Administration and they are flown by more than 160,000 certified remote pilots.

(Reporting by David Shepardson; Editing by Tom Brown)

Special report – Hobbling Huawei: Inside the U.S. war on China’s tech giant

By Cassell Bryan-Low, Colin Packham, David Lague, Steve Stecklow and Jack Stubbs

CANBERRA (Reuters) – In early 2018, in a complex of low-rise buildings in the Australian capital, a team of government hackers was engaging in a destructive digital war game.

The operatives; agents of the Australian Signals Directorate, the nation’s top-secret eavesdropping agency. had been given a challenge. With all the offensive cyber tools at their disposal, what harm could they inflict if they had access to equipment installed in the 5G network, the next-generation mobile communications technology, of a target nation?

What the team found, say current and former government officials was sobering for Australian security and political leaders: The offensive potential of 5G was so great that if Australia were on the receiving end of such attacks, the country could be seriously exposed. The understanding of how 5G could be exploited for spying and to sabotage critical infrastructure changed everything for the Australians, according to people familiar with the deliberations.

Mike Burgess, the head of the signals directorate, recently explained why the security of fifth generation, or 5G, technology was so important: It will be integral to the communications at the heart of a country’s critical infrastructure – everything from electric power to water supplies to sewage, he said in a March speech at a Sydney research institute.

Washington is widely seen as having taken the initiative in the global campaign against Huawei Technologies Co Ltd, a tech juggernaut that in the three decades since its founding has become a pillar of Beijing’s bid to expand its global influence. Yet Reuters interviews with more than two dozen current and former Western officials show it was the Australians who led the way in pressing for action on 5G; that the United States was initially slow to act; and that Britain and other European countries are caught between security concerns and the competitive prices offered by Huawei.

The Australians had long harbored misgivings about Huawei in existing networks, but the 5G war game was a turning point. About six months after the simulation began, the Australian government effectively banned Huawei, the world’s largest maker of telecom networking gear, from any involvement in its 5G plans. An Australian government spokeswoman declined to comment on the war game.

After the Australians shared their findings with U.S. leaders, other countries, including the United States, moved to restrict Huawei.

The anti-Huawei campaign intensified last week, when President Donald Trump signed an executive order that effectively banned the use of Huawei equipment in U.S. telecom networks on national security grounds and the Commerce Department put limits on the firm’s purchasing of U.S. technology. Google’s parent, Alphabet, suspended some of its business with Huawei, Reuters reported.

Until the middle of last year, the U.S. government largely “wasn’t paying attention,” said retired U.S. Marine Corps General James Jones, who served as national security adviser to President Barack Obama. What spurred senior U.S. officials into action? A sudden dawning of what 5G will bring, according to Jones.

“This has been a very, very fast-moving realization” in terms of understanding the technology, he said. “I think most people were treating it as a kind of evolutionary step as opposed to a revolutionary step. And now that light has come on.”

The Americans are now campaigning aggressively to contain Huawei as part of a much broader effort to check Beijing’s growing military might under President Xi Jinping. Strengthening cyber operations is a key element in the sweeping military overhaul that Xi launched soon after taking power in 2012, according to official U.S. and Chinese military documents. The United States has accused China of widespread, state-sponsored hacking for strategic and commercial gain.

A THREAT TO CRITICAL INFRASTRUCTURE

If Huawei gains a foothold in global 5G networks, Washington fears this will give Beijing an unprecedented opportunity to attack critical infrastructure and compromise intelligence sharing with key allies. Senior Western security officials say this could involve cyber attacks on public utilities, communication networks and key financial centers.

In any military clash, such attacks would amount to a dramatic change in the nature of war, inflicting economic harm and disrupting civilian life far from the conflict without bullets, bombs or blockades. To be sure, China would also be vulnerable to attacks from the U.S. and its allies. Beijing complained in a 2015 defense document, “China’s Military Strategy,” that it has already been a victim of cyber-espionage, without identifying suspects. Documents from the National Security Agency leaked by American whistleblower Edward Snowden showed that the United States hacked into Huawei’s systems, according to media reports. Reuters couldn’t independently verify that such intrusions took place.

However, blocking Huawei is a huge challenge for Washington and its closest allies, particularly the other members of the so-called Five Eyes intelligence-sharing group; Britain, Canada, Australia and New Zealand. From humble beginnings in the 1980s in the southern Chinese boomtown of Shenzhen, Huawei has grown to become a technology giant that is deeply embedded in global communications networks and poised to dominate 5G infrastructure. There are few global alternatives to Huawei, which has financial muscle – the company reported revenue for 2018 jumped almost 20 percent to more than $100 billion – as well as competitive technology and the political backing of Beijing.

“Restricting Huawei from doing business in the U.S. will not make the U.S. more secure or stronger,” the company said in a statement in response to questions from Reuters. Such moves, it said, would only limit “customers in the U.S. to inferior and more expensive alternatives.”

For countries that exclude Huawei there is a risk of retaliation from Beijing. Since Australia banned the company from its 5G networks last year, it has experienced disruption to its coal exports to China, including customs delays on the Chinese side. In a statement, China’s foreign ministry said it treated “all foreign coal equally” and that to assert “China has banned the import of Australian coal does not accord with the facts.”

Tension over Huawei is also exposing divisions in the Five Eyes group, which has been a foundation of the post-Second World War Western security architecture. During a trip to London on May 8, U.S. Secretary of State Mike Pompeo issued a stark warning to Britain, which has not ruled out using Huawei in its 5G networks. “Insufficient security will impede the United States’ ability to share certain information within trusted networks,” he said. “This is exactly what China wants; they want to divide Western alliances through bits and bytes, not bullets and bombs.”

Huawei’s 74-year old founder, Ren Zhengfei, is a former officer in China’s military, the People’s Liberation Army. “Mr. Ren has always maintained the integrity and independence of Huawei,” the company said. “We have never been asked to cooperate with spying and we would refuse to do so under any circumstance.”

In an interview with Reuters at the company’s headquarters in Shenzhen, Eric Xu, a deputy chairman, said Huawei had not allowed any government to install so-called backdoors in its equipment – illicit access that could enable espionage or sabotage – and would never do so. He said 5G was more secure than earlier systems.

“China has not and will not demand companies or individuals use methods that run counter to local laws or via installing ‘backdoors’ to collect or provide the Chinese government with data, information or intelligence from home or abroad,” the Chinese foreign ministry said in a statement in response to questions from Reuters.

Washington argues that surreptitious backdoors aren’t necessarily needed to wreak havoc in 5G systems. The systems will rely heavily on software updates pushed out by equipment suppliers – and that access to the 5G network, says the United States, potentially could be used to deploy malicious code.

So far, America hasn’t publicly produced hard evidence that Huawei equipment has been used for spying.

Asked whether the United States was slow to react to potential threats posed by 5G, Robert Strayer, the State Department’s lead cyber policy diplomat, told Reuters that America had long been concerned about Chinese telecom companies, but that over the past year, as 5G loomed closer, “we were starting to talk more and more with our allies.” Banning Huawei from 5G networks remains “an end goal,” he said.

THE TECH THREAT

The West has long harbored concerns about Chinese telecom equipment. In 2012, a U.S. House Intelligence Committee report concluded Chinese tech companies posed a national security threat. Huawei denounced the finding.

Despite such concerns, the U.S. government’s response to the threats posed by 5G only took shape more recently.

In February 2018, Malcolm Turnbull, then prime minister of Australia, flew to Washington D.C. Even before Australia’s eavesdropping agency had run its war game, Turnbull was already raising red flags in Washington. A former technology entrepreneur, he believed 5G presented significant risks and wanted to press allies to act against Huawei.

“He was warning about how important 5G networks would be and the security risks we all needed to think about around countries that had capability, form and intent, as well as coercive laws,” a senior Australian source told Reuters.

A spokesman for Turnbull declined to comment.

Turnbull and his advisers met U.S. officials, including Kirstjen Nielsen, then U.S. secretary of homeland security, and Michael Rogers, then head of the U.S. National Security Agency, the U.S. signals-intelligence operation. The Australians said they believed Beijing could compel Huawei to do its bidding and that this posed a threat should tensions with China rise in the future, said two of the Australian officials familiar with the meeting.

The U.S. officials were receptive to the Australian message, but imposing restrictions on the world’s largest maker of mobile network gear didn’t appear to be a high priority, according to the two Australian officials. “They didn’t share our concern with the same urgency,” said one.

Rogers declined to comment. A Department of Homeland Security official did not elaborate on the meeting, but said the agency works closely with Australia on security issues and that “China will continue to use cyber espionage and bolster cyber-attack capabilities to support its national security priorities.”

5G technology is expected to deliver a huge leap in the speed and capacity of communications. Downloading data may be up to 100 times faster than on current networks.

But 5G isn’t only about faster data. The upgrade will see an exponential spike in the number of connections between the billions of devices, from smart fridges to driverless cars, that are expected to run on the 5G network. “It’s not just that there will be more people with multiple devices, but it will be machines talking to machines, devices talking to devices – all enabled by 5G,” said Burgess, the Australian Signals Directorate chief, in his March address.

This configuration of 5G networks means there are many more points of entry for a hostile power or group to conduct cyber warfare against the critical infrastructure of a target nation or community. That threat is magnified if an adversary has supplied equipment in the network, U.S. officials say.

Huawei said in its statement that the company does “not control in any way the networks in which our equipment is deployed by our clients. The US and Australian allegations are fanciful and are not rooted in any evidence at all.”

In July 2018, Britain delivered a blow to Huawei. A government-led panel that includes senior intelligence officials said it was no longer fully confident it could manage national security risks posed by the Chinese telecom equipment giant.

That panel oversees the work of a laboratory that was set up by the British government in 2010 and is funded by Huawei to vet the company’s equipment used in the UK. The facility was established because even then Huawei was perceived as a security risk. The oversight panel said serious problems it had identified with Huawei’s engineering processes “exposed new risks in the UK telecommunication networks and long-term challenges in mitigation and management.”

That report was a “bombshell,” shaping how the Americans viewed the Huawei 5G risk, said one U.S. official.

U.S. officials also point to Chinese laws enacted in recent years that they say could compel individuals and companies to assist the Chinese government in conducting espionage.

China’s foreign ministry called this portrayal by U.S. officials of Chinese legislation “a misreading and a wanton smearing of relevant Chinese laws,” adding: “Trying to smear others to wash oneself clean is futile.”

THE WEST AWAKES

Through the middle of last year, the Australians continued to apprise other countries of their worries about 5G. “We were sharing our concerns about security with many allies, not just the U.S. and not just the traditional partners,” said one of the senior Australian officials. “We shared our thoughts with Japan, Germany, other European countries and South Korea.”

In Washington, the administration began imposing restrictions on Huawei. In August, Trump signed a bill banning federal agencies and their contractors from using equipment from Huawei and ZTE Corp, another Chinese telecom equipment maker. Huawei has since filed a lawsuit in federal court in Texas challenging the ban.

In late August, the Australians went further: They banned companies that didn’t meet their security requirements, which included Huawei, from supplying any equipment for the country’s 5G network, whether run by the government or by private firms.

Australia’s decision, China’s Foreign Ministry said in a statement, “has no basis in fact, and is an abuse of ‘national security’ standards. China urges the Australian side to abandon Cold War thinking and ideological prejudices, and provide a fair, transparent, non-discriminatory environment for Chinese companies.”

In November, New Zealand’s intelligence agency blocked the country’s first request by a telecom service provider to use Huawei kit for a 5G network, citing national security concerns.

Like the Australians and Americans, British security officials had concerns over China’s potential use of Huawei as a channel for conducting espionage. But the options are limited. Huawei is one of only three major global companies that analysts say can supply a broad range of advanced mobile network equipment at scale. The other two are Ericsson and Nokia. And Huawei has a reputation among telecom operators for supplying cost-effective equipment promptly.

Nevertheless, British security officials were becoming increasingly frustrated with what they viewed as Huawei’s failure to fix software flaws in its equipment, particularly discrepancies in the source code; the programs’ underlying set of instructions. This problem means the laboratory near Oxford set up to vet Huawei equipment cannot even be sure that the code it is testing is exactly the same as the code Huawei deploys in its real-world equipment. This makes it difficult to provide safety assurances about the company’s gear.

British officials say the array of flaws could be exploited by China, as well as other malevolent actors. Ian Levy, a British security official who oversees the UK’s review of Huawei equipment, told Reuters the company’s software engineering is like something from 20 years ago. “The chance of a vulnerability with a Huawei piece of kit is much higher than other vendors,” he said.

The company said it has pledged to spend at least $2 billion “over the next five years” to improve its software engineering capabilities.

British ministers have agreed to allow Huawei a restricted role in building parts of its 5G network, but the government has yet to announce its final decision. The European Union has left it to individual governments to decide whether to ban any company on national security grounds. Some European security officials say banning one supplier doesn’t address the broader issue of the risks posed by Chinese technology in general.

HUAWEI FIGHTS BACK

As the tensions between the West and Huawei intensified through last year, they suddenly took a personal turn. U.S. law enforcement officials had for some time been investigating links between Huawei and Iran, including the involvement of Meng Wanzhou, Huawei’s chief financial officer, who is the daughter of the company’s founder. The probe followed Reuters stories in 2012 and 2013 that revealed links between Huawei, Meng and another company that allegedly attempted to violate U.S. sanctions on Iran.

When U.S. officials became aware that Meng would be traveling through Vancouver in December, they pounced, asking Canada to detain her on allegations of bank and wire fraud. Meng remains free on bail in Canada while the U.S. government tries to have her extradited. Huawei said in its statement that Meng “is not guilty of the charges she faces,” and that they are “politically motivated.”

The Huawei conflict isn’t only about U.S.-China superpower rivalry: The activities of Meng and Huawei were under scrutiny by U.S. authorities long before Trump began a trade war with China, according to interviews with people familiar with those probes. But there is no doubt the wider showdown with Huawei has now become intensely geopolitical.

In recent months, the U.S. has ramped up diplomatic efforts to urge allies to sideline Huawei. 5G is a “game-changing technology with implications across all aspects of society from business, government, military and beyond,” Gordon Sondland, U.S. ambassador to the European Union, told Reuters in February. “It seems common sense to me to not hand over the keys to your entire society to an actor that has … demonstrated malign conduct.”

Asked whether there is evidence of Huawei equipment having been used for espionage, Sondland said “there is classified evidence.” He declined to expand on the nature of the material beyond saying there was no doubt that Huawei had “the capability to hack a system” and “the mandate by the government to do so upon request.”

Pompeo has publicly gone further than most U.S. officials by directly linking the company to Beijing. “Huawei is owned by the state of China and has deep connections to their intelligence service,” he said in March. “That should send off flares for everybody who understands what the Chinese military and Chinese intelligence services do.”

Huawei has repeatedly denied it is controlled by the government, military or Chinese intelligence services. “U.S. Secretary of State Pompeo is wrong,” the company said in its statement, adding that it is owned by its employees.

While Huawei was initially muted in its public response, it too has become more combative. In late February, the company confronted the United States at a major annual gathering of mobile industry executives in Barcelona, where Huawei’s red logo was ubiquitous. Top American officials arrived intent on warning government and industry representatives off Huawei. But the company had flown in a team of senior executives to offer customers and representatives of European governments reassurance in the face of the U.S. accusations.

In a keynote speech, Guo Ping, a deputy chairman at Huawei, took aim at America’s own spying operations. “Prism, Prism on the wall. Who’s the most trustworthy of them all?” he said. Guo was referring to a mass U.S. foreign-surveillance operation called Prism that was disclosed by former NSA contractor Snowden. The barb drew laughter from the audience.

Europeans pushed back, too. During one closed-door session, senior representatives from European telecom operators pressed a U.S. official for hard evidence that Huawei presented a security risk. One executive demanded to see a smoking gun, recalled the U.S. official.

The American official fired back: “If the gun is smoking, you’ve already been shot. I don’t know why you’re lining up in front of a loaded weapon.”

(Reporting by Cassell Bryan-Low, Colin Packham, David Lague, Steve Stecklow and Jack Stubbs. Additional reporting by Charlotte Greenfield in Wellington; Yoshifumi Takemoto in Tokyo; Jonathan Weber; Sijia Jiang; Ben Blanchard and Gao Liangping in Beijing. Edited by Peter Hirschberg and Richard Woods.)

Dutch security agency warns against Chinese, Russian technology

FILE PHOTO: EU leaders including Belgian Prime Minister Charles Michel (C), Netherlands Prime Minister Mark Rutte (R), Luxembourg Prime Minister Xavier Bettel (L) and Italian Prime Minister Paolo Gentiloni (rear left) gather around a computer screen at the European Union leaders summit in Malta, February 3, 2017. REUTERS/Darrin Zammit-Lupi/File Photo

AMSTERDAM (Reuters) – The Dutch security service advised the government on Tuesday not to use technology from countries with active cyber-hacking campaigns against the Netherlands, such as China and Russia.

The recommendation came as the Dutch government is weighing options for a new 5G telecommunications network in the coming years and seeks to replace its domestic emergency services network, known as C2000.

The AIVD security agency flagged Chinese and Russian attempts at digital espionage as a major security risk.

“It is undesirable for the Netherlands to exchange sensitive information or for vital processes to depend on the hardware or software of companies from countries running active cyber programs against Dutch interests,” the AIVD said in its annual report.

Prime Minister Mark Rutte has refused to rule out doing business with Chinese technology companies, even as key allies the United States and Australia restricted Huawei Technologies from accessing its next-generation mobile networks on national-security grounds.

Washington has said that Huawei is at the beck and call of the Chinese state, warning that its network equipment may contain “back doors” that could open them up to cyber espionage. Huawei says such concerns are unfounded.

(Reporting by Anthony Deutsch; Editing by Robin Pomeroy)