huawei and zte pose security threat, warns us panel
TRANSCRIPT
HUAWEI AND ZTE POSE SECURITY THREAT, WARNS US PANEL
Omkar Pradeep Phutane (Roll no. SMM-24)
Business Law Assignment
HUAWEI [1] [7]
Industry: Telecommunication equipment, Networking equipment.
Type: PrivateCompany.
A leading telecom infrastructure and solutions company.
Huawei has gained a leading position in the industrywith comprehensive strength in wire line,
wireless and IP technologies.
Serves worldwide over 140 countries and regions globally.
ZTE(formerly Zhongxing Telecommunication Equipment Corporation)[2]
Industry:Telecommunication equipment.
Type: Public Company.
It is the world's fourth-largest mobile phone manufacturer measured by 2012 unit sales.
World's fifth-largest telecoms equipment maker measured by 2011 revenues
SECURITY CONCERN[3] [4] [5] [6] [8]
ZTE mobile phones sold in the UScan be remotely accessed with an easily obtainable password.
US security officials stated that Huawei made telecommunications equipment allows
unauthorized access by the Chinese government.
Both have been accused of using the spying codes to relay sensitive information back to China.
July 2012, US announced that they uncovered several critical vulnerabilities in Huawei routers
which provide a remote access to the device.
8 October 2012, US House Intelligence Committee panel issued a report describing Huawei as a
"National Security Threat" due to its suspicious ties to various Chinese governmental agencies.
25 October 2012, a Reuters report wrote, an Iranian-based seller of Huawei tried to sell
embargoed American antenna equipment to an Iranian firm.
ZTE is also facing accusations as it sold US telecoms equipment to Iran, in breach of US
sanctions.
Reuters said that ZTE had sold Iran a surveillance system capable of monitoring landline, mobile and internet communications.
The panel's report suggested that Huawei and ZTE should be barred from doing business with the US government.
Huawei responded with a statement claiming the story misrepresented the company's involvement.
ZTE denied these charges, saying there was nothing sinister in the way the firm's equipment functioned.
A subsequent White House-ordered review found no concrete evidence to support the House reports.
THE LEGAL ISSUE AND COMPLIANCE [6][8][9] [10]
Selling any embargoed equipment to any other country is a crime.
The Huawei and ZTE both are controversial in their business since before.
If the equipment can relay information back to china then it’s a major security threat to US.
The investigations have found no any concrete evidence stating the spying by two Chinese
multinationals.
Neither Huawei nor ZTE addressed concerns raised repeatedly by lawmakers over their ability
to snoop on American companies or individuals.
Neither company was forthcoming with detailed information about its formal relationships or
regulatory interaction with Chinese authorities.
The companies have denied any influence from the Chinese government, and have been
working to improve the perception of their businesses in the U.S.
ZTE, meanwhile, reiterated its claim that the company poses no threat to the U.S. telecommunications infrastructure.
It is unclear if security vulnerabilities found in Huawei and ZTE equipment were placed there deliberately.
IMPACT OF THE LEGAL ISSUE ON THE STAKEHOLDERS[11]
The Hong Kong-listed shares of ZTE slumped by 6%.[12]
Huawei and ZTE launched global campaigns to counter the conclusions of the House intelligence committee report.
U.S. network providers and systems developers are strongly encouraged to seek other vendors for their projects
Bill Plummer, Huawei's vice president for external affairs, called the report a "political distraction" when asked if it would impact the company's business in the U.S.
HOW IT CAN BE AVOIDED OR DEALT WITH
Republican committee chairman Mike Rogers said they had passed on information to the FBI to investigate the allegations.
The two firms should be barred from any US mergers and acquisitions when under investigation.
If the investigations come up empty on past malicious acts then the two MNCs can be allowed to do business in US.
US can set up a surveillance system to keep a watch on the networking of the two companies.
US government can raise private-sector security standards and readying a more limited executive order along those lines.
If the hacking was due to poor programming then US government can avoid it by raising security standards.
WEBLIOGRAPHY
1. http://en.wikipedia.org/wiki/HUAWEI
2. http://en.wikipedia.org/wiki/ZTE
3. http://www.bbc.co.uk/news/business-19867399
4. http://www.bbc.co.uk/news/technology-19988919
5. http://www.bbc.co.uk/news/business-19595778
6. http://www.reuters.com/article/2012/10/18/us-huawei-spying-idUSBRE89G1Q920121018
7. http://www.huawei.com/in/about-huawei/corporate-info/index.htm
8. http://www.phonearena.com/news/Huawei-ZTE-may-be-doing-espionage-for-China_id35269
9. http://news.cnet.com/8301-1035_3-57527782-94/lawmakers-to-u.s-companies-dont-buy-
huawei-zte/
10. http://www.reuters.com/article/2012/10/17/us-huawei-spying-idUSBRE89G1Q920121017
11. http://online.wsj.com/article/SB10000872396390443982904578044190738613734.html
12. http://www.bbc.co.uk/news/business-19879735
THANK YOU