3rd Party Risk Management , Critical Infrastructure Security , Governance & Risk Management

Canada Bans Huawei, ZTE to Secure Telecom Systems

Government Says Closest Allies Share Similar Concerns
Canada Bans Huawei, ZTE to Secure Telecom Systems
Huawei and ZTE 5G equipment must be removed by June 28, 2024. (Source: Huawei)

The Canadian government says it will no longer allow the use of products and services from China's Huawei Technologies and ZTE Corp. in its telecommunications systems. The government says its decision is based on reviews by independent security agencies and was made in consultation with its "closest allies."

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"Telecommunications companies that operate in Canada would no longer be permitted to make use of designated equipment or services provided by Huawei and ZTE," says François-Philippe Champagne, minister of innovation, science and industry, on Thursday.

The move, he says, is part of a broader agenda to promote the security of Canada's telecommunications networks. Companies already using this equipment will be required to remove it from their networks, he adds.

"The government of Canada has serious concerns about suppliers such as Huawei and ZTE who could be compelled to comply with extrajudicial directions from foreign governments in ways that would conflict with Canadian laws or would be detrimental to Canadian interests," Champagne says.

5G Wireless Technology

As 5G networks offer "greater interconnectedness and interdependence," a breach or exploitation of this environment would "have a more significant impact on the safety and security of Canadians and Canadian critical infrastructure than in previous network generations," Champagne says.

The government also announced that the use of new 5G equipment and managed services from Huawei and ZTE will be prohibited, and existing 5G equipment and managed services must be removed or terminated by June 28, 2024.

"Any use of new 4G equipment and managed services from Huawei and ZTE will be prohibited, and any existing 4G equipment and managed services must be removed or terminated by December 31, 2027. The government expects that telecommunications service providers will cease procurement of new 4G or 5G equipment and associated services by September 1, 2022," Champagne says.

Without naming any particular country, Champagne says that Canada's closest allies shared similar security concerns about Huawei and ZTE and have banned its product and services from their 5G telecommunications networks.

The Canadian government also intends to impose restrictions on Gigabit Passive Optical Network equipment used in fiber-optic networks.

"During these transition periods, telecommunications service providers that use this equipment and managed services would be required to comply with any assurance requirements prescribed by the government, building from the Communications Security Establishment’s Security Review Program," according to a policy statement issued by the Canadian government.

Intense Scrutiny

Other nations are also closely examining the technology used in their telecom systems. In June 2021, the government of India launched a Trusted Telecom Portal designed to evaluate and approve technologies and suppliers.

The government is yet to designate technology providers as "trusted" or "untrusted," but some observers predicted that Chinese firms, such as Huawei and ZTE, will not be included on the list of approved vendors that can supply equipment to telecom companies, including for 5G network development.

Chinese vendors, including Huawei and ZTE, have denied accusations of providing backdoor access in their systems to the Chinese government. Huawei also promised the Indian government it wouldn't access customers' networks without consent (see: Huawei Offers 'No Backdoor' Assurance, But Tests Are Needed).

Other nations, including the United States and the United Kingdom, have taken similar actions to restrict the use of technology from Chinese firms over security concerns, such as potential spying.

"[Canada] is a bit slow to the party," says Alan Calder, CEO of IT risk management solutions provider GRC International Group. "The USA banned Huawei while [Donald] Trump was still officially president, and so has Britain. China is probably NATO and the West's most significant geopolitical challenger, and it doesn't make sense to let their tech into our infrastructure. Think how much easier Chinese cyberespionage and cyberattacks would be if they did."

In July 2020, the U.S. Federal Communications Commission designated Huawei and ZTE as national security threats, barring American telecommunications companies from using certain federal funds to buy their equipment for purposes such as building 5G networks (see: FCC: Huawei, ZTE Are 'National Security Threats').

Huawei continues to face intense scrutiny in the U.S and European countries over security concerns about the use of its technologies (see: Will UK Rip and Replace Huawei Sooner Rather Than Later?).

In 2019, the U.S. Federal Trade Commission designated Huawei and ZTE as threats to U.S. national security because their tech could potentially be used to spy on communications on behalf of the Chinese government.

As a result, smaller and rural U.S. telecom companies and wireless carriers can no longer tap into the FCC's $8.3 billion Universal Service Fund to buy equipment from Huawei and ZTE. The commission is requiring that certain telecom companies remove and replace the Chinese equipment in their networks (see: FCC: Rip and Replace Huawei, ZTE Gear to Cost $1.8 Billion).

Also in 2019, the U.S. Commerce Department put both Huawei and ZTE on its "entity list," which effectively blacklisted both companies from doing business in the U.S. The federal government has also restricted Huawei's ability to gain access to U.S. chip technology (see: FCC Upholds Ruling That Huawei Poses National Security Threat).

About the Author

Prajeet Nair

Prajeet Nair

Assistant Editor, Global News Desk, ISMG

Nair previously worked at TechCircle, IDG, Times Group and other publications, where he reported on developments in enterprise technology, digital transformation and other issues.

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