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Canada to ban Huawei/ZTE 5G equipment, joining Five Eyes allies

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OTTAWA, May 20 (Reuters) – Canada on Thursday announced plans to ban the use of Chinese 5G equipment Huawei Technologies Co Ltd (HWT.UL) and ZTE Corp (000063.SZ) to protect national security, joining the rest of the so-called Five Eyes intelligence-sharing network.

“We intend to exclude Huawei and ZTE from our 5G networks,” Industry Minister Francois-Philippe Champagne told reporters in Ottawa. “Vendors who have already installed this equipment will need to stop using it and remove it as part of the plans we are announcing today.”

Champagne added that companies will be required to retire their 5G equipment by June 2024, will not be reimbursed. Companies using their 4G equipment must be retired by the end of 2027.

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The decision – widely expected – had been delayed due to diplomatic tensions with China. The rest of the Five Eyes network – which includes Canada, the United States, Britain, Australia and New Zealand – has already banned the equipment.

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In September 2018, Canada announced for the first time that it would review possible national security threats by adopting Huawei equipment.

Then, in December of the same year, Huawei chief financial officer Meng Wanzhou was arrested in Canada on US warrant, creating a long-running dispute with China that finally ended last September with Meng’s release. .

After Meng’s arrest, two Canadians were arrested by Beijing and charged with espionage. Both men were released the same day as Meng. Read more

Now, diplomatic tensions between China and Canada have eased somewhat. On Wednesday, China lifted a three-year restriction on Canadian canola seed imports, reversing what was seen as retaliation for Meng’s arrest. Read more

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Thursday’s decision comes after telecom companies in Canada have already opted to use other companies’ 5G hardware.

China expressed its opposition to this decision. “We will take all necessary measures to safeguard the legitimate interests of Chinese companies,” Foreign Ministry spokesman Wang Wenbin told reporters in Beijing on Friday.

A spokesman for the Chinese Embassy in Canada said the alleged security concerns were a “pretext for political manipulation” and accused Canada of working with the United States to crack down on Chinese companies.

Alykhan Velshi, Huawei’s vice president of corporate affairs in Canada, said in an interview with the Canadian Broadcasting Corp that the company is still waiting to hear “what kind of national security threats they believe Huawei poses.”

Velshi said Huawei still had 1,500 employees in Canada, mostly in research and development, and selling products like mobile phones, and would continue to do so.

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ZTE did not immediately respond to requests for comment.

In 2020, Bell Canada (BCE.TO) and its rival Telus Corp (T.TO) – two of the largest wireless service providers – teamed up with Sweden’s Ericsson (ERICb.ST) and Finland’s Nokia Oyj (NOKIA. HE) to build the fifth generation (5G) telecommunications networks, dropping Huawei for the project despite using Huawei 4G equipment.

In addition to the ban, Public Safety Minister Marco Mendicino said Canada would draft new legislation to protect critical financial, telecommunications, energy and transportation infrastructure from cyber threats.

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Reporting by David Ljunggren, additional reporting by Ismail Shakil, David Kirton and Yew Lun Tian; written by Steve Scherer; Editing by Sandra Maler and Stephen Coates

Our standards: The Thomson Reuters Trust Principles.

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