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Poland Arrests 2, Including Huawei Employee, Accused of Spying for China

The Polish authorities arrested two people, including a Chinese employee of the telecommunications giant Huawei, and charged them with spying for Beijing, officials said on Friday, as the United States and its allies move to restrict the use of Chinese technology because of concerns that it is being used for espionage.

The arrest of the Huawei employee is almost certain to escalate tensions between Western countries and China over the company, which the authorities in the United States have accused of acting as an arm of the Chinese government and making equipment designed for spying.

In December, the daughter of Huawei’s founder was arrested in Canada at the request of the United States, which said she had committed fraud as part of a scheme to violate American sanctions against companies doing business with Iran. It was unclear whether the arrests in Poland had been requested by the United States. But a senior Western diplomat who was briefed on them said the Justice Department had been working with the Polish government.

Europe is increasingly a battleground in the fight over Huawei, the world’s second-largest smartphone maker and a top supplier of networking equipment. The company’s sales in the region have been growing, but many countries there now face pressure to reconsider its presence, particularly as construction begins for the next-generation wireless networks known as 5G. Germany, Britain, the Czech Republic and Norway are among the nations that have recently questioned how deeply Huawei should be involved in developing 5G infrastructure.

Many of the countries adopting this stance are allies of the United States. Poland, specifically, is regarded by the State Department as “one of the United States’ strongest partners” in continental Europe. And Andrus Ansip, the European Union’s vice president, said last month that countries in the region should be “worried” about Huawei and other Chinese companies because of the cybersecurity risks they pose.

Other countries face the same dilemma. In December, Japan barred Huawei from obtaining government contracts, and Australia and New Zealand have taken steps to block the company from being involved in the building of 5G networks in those countries. And the Czech National Cyber and Information Security Agency recently restated its long-standing warnings about Huawei and ZTE, another Chinese telecommunications company.

“Picking sides may be unavoidable,” said Lukasz Olejnik, a research associate at the Center for Technology and Global Affairs at Oxford University, which studies the impact of technology on international relations. “This is a difficult policy conundrum.”

Huawei has long denied spying for the Chinese government. On Friday, a spokesman for the company said it had no comment on the arrest in Poland and insisted that it “complies with all applicable laws and regulations in the countries where it operates.”

The second person arrested is an employee of the French telecommunications company Orange, which confirmed that its office had been raided and that the man’s belongings had been seized.

“We are ready to cooperate with the Internal Security Agency and make any information it needs available,” the Orange spokesman, Wojciech Jabczynski, said.

Hu Xijin, the editor in chief of Global Times, a state-run, nationalist newspaper in China, took a swipe at Poland on Twitter on Friday, writing: “Anything in Poland that is worthy of stealing for Huawei? Polish national security department flatters itself.”

In another message, he said he had met up with a friend who works at Huawei. “He said Huawei is facing great difficulties communicating with Western public opinion,” Mr. Hu wrote. “I said Huawei has been trying to distance itself from politics, but it has grown too big that politics is coming to its door. Huawei is innocent.”

The arrested Huawei employee was identified by the authorities only as Weijing W. He was involved in the company’s sales operations in the country, officials said. According to Polish television, Weijing W. graduated from Beijing Foreign Studies University with a degree in Polish studies and once worked at the Chinese Consulate in Gdansk, Poland. He began working for Huawei in 2011.

The Orange employee was identified as Piotr D., a Polish citizen and former agent of Poland’s internal security service.

Polish law enforcement officers raided the homes and offices of the two men on Tuesday, officials said. The authorities then had to wait two days to obtain arrest warrants, typical for Poland. Officials did not offer details on the alleged crimes, but said the men would be held for three months while the investigation continued. Both have pleaded not guilty and have refused to answer questions, the Polish state television broadcaster, TVP, reported.

The senior Western diplomat briefed on the investigation, who spoke on the condition of anonymity, would not describe the level of cooperation between Poland and the United States. The official also declined to discuss specifics of the case or evidence that may have been shared with the Polish government.

But the official said the threat posed by Huawei was a high priority for American officials throughout Europe.

Huawei was founded in 1987 by Ren Zhengfei, a former People’s Liberation Army engineer. The company’s equipment is the backbone of mobile networks around the world, and its smartphones are popular in Europe and China. Huawei has grown into China’s largest maker of telecom equipment, generating more than $90 billion in revenue in 2017.

The company has been a leading contender to design 5G networks in Europe and other parts of the world, but the security concerns of Western countries have repeatedly hampered its expansion plans.

In a 2012 report, American lawmakers said Huawei and ZTE were effectively arms of the Chinese government whose equipment was being used for espionage. Security firms have reported finding software installed on Chinese-made phones that sends users’ personal data to China.

For many years, the United States, where large mobile carriers such as AT&T have avoided using Huawei equipment in their networks, has presented the biggest obstacles to the company.

Last year, United States intelligence agencies told a Senate panel that Americans should not use Chinese telecom products, and some major American retailers have stopped selling them. The Federal Communications Commission is also considering whether to prohibit American telecom businesses from using equipment from any company deemed a national security risk, a move aimed primarily at Huawei and ZTE that would effectively shut them out of creating 5G mobile networks.

Huawei has focused on Europe instead, opening several research and development hubs in the region. More than a quarter of its 2017 revenue came from Europe, the Middle East and Africa. Only the Chinese market is more important to the company.

Telecommunication companies in Europe have strong relationships with Huawei. Deutsche Telekom said in December that it had begun testing a 5G network in Poland using Huawei equipment. Mr. Jabczynski, the Orange spokesman, said Huawei was the only company in Poland ready to provide equipment that met criteria set by state regulations.

Huawei also has around a quarter of the market for smartphones in Poland, according to the technology research firm Canalys. That makes it the country’s second-largest phone seller after Samsung.

But the challenges facing Huawei in Europe are mounting.

British officials raised alarms about the company’s products last year. The Czech Republic’s cybersecurity watchdog has warned against using Huawei and ZTE products. And just this week, Tor Mikkel Wara, Norway’s justice minister, told Reuters that “we share the same concerns as the United States and Britain, and that is espionage on private and state actors in Norway.”

In Poland, at least one of the country’s main mobile carriers has been edging away from the company. The carrier, Play, has long relied on the company as an equipment supplier. And China Development Bank, a state-backed lender, has helped finance Play’s buying of Huawei equipment, according to the website of Lasanoz Finance, an advisory firm that says it worked on the deal. When Play listed its shares on the Warsaw stock exchange in 2017, it said Huawei had provided a “significant portion” of the equipment on its network.

But last July, as concerns about Chinese hardware grew, Play announced that it had chosen Ericsson as an additional supplier for certain components.

The arrests in Poland promised to generate more concerns about the company, said David Balson, a former official in the British intelligence agency GCHQ who is now the director of intelligence at Ripjar, a threat detection company in London.

“There is no good outcome whether it’s true or not true,” Mr. Balson said. “There is no good way of spinning it.”

Poland and other countries that crack down on Huawei risk retaliation from China. Shortly after the Canadian authorities arrested Meng Wanzhou, the daughter of Mr. Ren, the Huawei founder, China detained two Canadian citizens last month and accused them of undermining China’s national security. China has since detained other Canadians.

Ms. Meng has been freed on bail in Vancouver, British Columbia, pending a decision on whether she should be extradited to the United States. This week, the public face of Huawei in Canada, Scott Bradley, left the company.

“This will definitely increase tension in Europe,” said Christian Schmidkonz, a professor of Asian-Pacific business studies at the Munich School of Business.

[Source: By Adam Satariano and Joanna Berendt, The New York Times, London, 11Jan19]

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