Europe should be afraid of Huawei, EU tech official says

By Francesco Guarascio and Philip Blenkinsop

BRUSSELS (Reuters) - The European Union should be worried about Huawei and other Chinese technology companies because of the risk they pose to the bloc's industry and security, the EU's technology commissioner said on Friday.

"Do we have to be worried about Huawei or other Chinese companies? Yes, I think we have to be worried about those companies," Andrus Ansip told a news conference in Brussels, days after a top executive at Chinese tech giant Huawei was arrested in Canada as part of an investigation into alleged bank fraud.

Huawei, which generated $93 billion in revenue last year and is seen as a national champion in China, faces intense scrutiny from many Western nations over its ties to the Chinese government, driven by concerns it could be used by Beijing for spying.

Ansip said he was concerned because Chinese technology companies were required to cooperate with Chinese intelligence services, such as on "mandatory back doors" to allow access to encrypted data.

He also said those companies produce chips that could be used "to get our secrets".

"As normal, ordinary people we have to be afraid," he said, adding he did not have enough information about the recent arrest in Canada.

Germany said on Friday it opposed excluding any manufacturers from the planned construction of 5G mobile networks.

Belgium's centre for cybersecurity was considering the possibility of banning Huawei in the country, newspapers L'Echo and De Tijd reported. The company supplies equipment to telecom providers Proximus and Orange Belgium.

The centre was not immediately reachable for comment.

The EU as a whole is braced to launch a far-reaching system to coordinate scrutiny of foreign investments into Europe following a surge of Chinese investments and concerns about security and forced technology transfer.

However, the arrest in Canada of Huawei chief financial officer Meng Wanzhou relates to a U.S. investigation into an alleged scheme to use the global banking system to evade U.S. sanctions against Iran, people familiar with the probe told Reuters.

Europeans too could potentially face prosecution in the United States, which has withdrawn from an agreement with Iran on its nuclear programme. Reimposed U.S. sanctions have already forced many European companies to stop trading with Iran.

Meng was due to appear in a court on Friday as she awaits a possible extradition to the United States.

(Reporting by Francesco Guarascio, Foo Yun Chee and Philip Blenkinsop; Editing by Mark Potter)