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Supply Chain Risk

EU nations can restrict providers according to new 5G guidelines, Huawei is at risk

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BRUSSELS – EU countries can exclude or restrict high-risk 5G providers from core areas of their telecommunications networks, as evidenced by new EU directives that deal a possible blow to Chinese companies Huawei Technologies.

The non-binding recommendations contained in an EU document reviewed by Reuters are part of a series of measures to address cyber security risks at national and EU levels, particularly concerns related to the Chinese company Huawei specific country or company.

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The document, which sets out the guidelines agreed by EU member states, warned of the risks of a third-country disruption in the 5G supply chain and the risk of being dependent on a single supplier to justify a tough line.

EU countries should assess the risk profile of suppliers at national or EU level and apply restrictions for high-risk suppliers, including the necessary exclusions to effectively mitigate the risks to important assets, the document said.

EU governments are also advised to diversify their suppliers and not be dependent on a company, and to use technical and non-technical factors to assess them.

While no individual companies or countries were mentioned in the guidelines, they were created because European countries are under pressure from the United States to ban Huawei devices because they fear that their equipment could be used by China to spy on.

Huawei, which competes with the Finnish Nokia and the Swedish Ericsson, has denied that it could be used for spying.

The guidelines also recommend that EU countries create a legal or regulatory framework to control the use of outsourced suppliers and their access to critically sensitive parts of the telecommunications infrastructure.

EU governments should also examine telecommunications operators, require them to provide detailed data on their 5G equipment procurement and describe how they implement basic security measures for technical networks, the document said.

EU chief of the digital economy, Margrethe Vestager, is expected to announce the next steps on January 29. The block sees 5G networks as the key to economic growth.

EU members like Germany disagree on whether Huawei should have access to their 5G networks, and Chancellor Angela Merkel prefers to apply the same rules to all equipment providers in the face of growing opposition from legislators in her own party.

Huawei has received support in the European telecommunications industry, including Deutsche Telekom, Vodafone and Telefonica, all of which are Huawei customers.

By Foo Yun Chee

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