Why is Chinese telecom firm Huawei blacklisted in the U.S.? FCC has labeled Chinese company a national security threat

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The Federal Communications Commission designated Chinese telecommunications firm Huawei a national security threat Tuesday and banned U.S. companies from using subsidies to buy Huawei’s equipment, but it’s far from the first time the company has faced suspicion from the U.S. government.

As far back as 2012, the House Intelligence Committee warned that Huawei could be a national security threat because its telecommunications equipment, when bought by U.S. companies, could be used by the Chinese government to spy on American citizens.

FCC Chairman Ajit Pai said this week that U.S. wireless providers are taking on great risks when they do business with a Chinese company like Huawei.

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“What we found was that these two companies, Huawei and ZTE, had ties to the Chinese Communist Party, had ties to China’s military apparatus, the People’s Liberation Army,” Pai told FOX Business on Tuesday. “And in addition to that, they are obligated, under Chinese law, if they get a request from the Chinese secret police, the intelligence services, they must comply with it, and they are prohibited from disclosing the fact of that request to any of their customers.”

Huawei is the largest provider of telecom equipment in the world with nearly 200,000 employees globally and $121 billion in revenue last year.

As Huawei has grown, the U.S. has ratcheted up pressure on the company.

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Canadian authorities arrested Huawei Chief Financial Officer Meng Wanzhou in December 2018 at the request of U.S. authorities on charges of violating trade sanctions. She is currently on house arrest in Vancouver and fighting extradition to the United States.

In February of this year, the U.S. government charged Huawei and two of its subsidiaries with racketeering and accused them of trying to steal trade secrets from six American companies.

The Department of Justice accused Huawei of misappropriating intellectual property for its own commercial use, “using proxies such as professors working at research institutions to obtain and provide” technology, and recruiting employees of competitors and directing them to give up their former employers’ intellectual property.

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The Trump administration also accused Huawei of doing business with sanctioned countries like Iran and North Korea, as well as lying to FBI investigators.

The Wall Street Journal reported in February that U.S. intelligence believes Huawei can secretly access wireless networks around the world with "back doors" that are only meant for law enforcement.

Last year, the Commerce Department put Huawei on the U.S. entity list, which forbids American companies from selling or transferring technology to Huawei unless granted permission from the Bureau of Industry and Security. But last month the Commerce Department amended that rule to allow certain types of cooperation between U.S. companies and Huawei.

Despite all the warnings, some U.S. wireless providers have continued to do business with Huawei over the last decade, especially small, rural providers. The Rural Wireless Association, a lobbying group that represents dozens of smaller wireless providers with less than 100,000 customers, said in December 2018 that a fourth of its membership was using equipment from Huawei or ZTE, another Chinese telecommunication company.

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Bigger providers like AT&T have kept Huawei out of the domestic market but have relied on Huawei elsewhere. The Wall Street Journal reported last year that AT&T uses Huawei’s equipment to run a large part of its network in Mexico.

Despite the charges from the U.S. government, Huawei has consistently denied any claims that it poses a security risk.

"We can prove that our equipment is not subject to any influence for the Chinese government, and we can prove that our employees are not subject to the Communist government," Huawei Technologies USA Chief Security Officer Andy Purdy told FOX Business earlier this year.