- U.K. Parliament's defence committee said in a new report that there is "clear evidence of collusion" between Huawei and the "Chinese Communist Party apparatus."
- They pointed to allegations of state funding to Huawei as well as the company potentially having to comply with China's national security laws.
- The lawmakers said that U.K. operators might have to consider ripping out Huawei gear from their 5G networks by 2025, rather than 2027, if certain conditions change.
There is "clear evidence of collusion" between Huawei and the "Chinese Communist Party apparatus," a new report from U.K. lawmakers claimed.
British members of parliament also suggest the Chinese telecom giant's equipment could be stripped out of the country's networks earlier than originally planned.
The latest comments from the U.K. will add pressure to Huawei, which has been blocked from key markets like Australia and Japan and is facing a number of sanctions from Washington that are aimed at cutting it off from key technologies like chips.
Huawei hit back at the report.
"This report lacks credibility, as it is built on opinion rather than fact. We're sure people will see through these groundless accusations of collusion and remember instead what Huawei has delivered for Britain over the past 20 years," a spokesperson told CNBC.
In July, the U.K. government announced that mobile network operators in the country would have to stop buying Huawei equipment by the end of this year. They would also need to rip out Huawei gear from their infrastructure by 2027.
That decision was a result of the U.K.'s National Cyber Security Center emergency review of Huawei shortly after the U.S. put new sanctions on the Chinese giant that cut it off from key semiconductor supplies.
A separate inquiry by the British Parliament's defense committee into the U.K.'s 5G security published Thursday, said that a 2027 timeline to remove Huawei gear from networks is "sensible" but a 2025 timeline could be considered under specific circumstances.
"Should pressure from allies for a speedier removal continue or should China's threats and global position change so significantly to warrant it, the Government should consider whether a removal by 2025 is feasible and economically viable," the lawmakers said.
"Clearly these restrictions will delay the 5G rollout and economically damage the UK and mobile network operators. The Government should take necessary steps to minimise the delay and economic damage and consider providing compensation to operators if the 2027 deadline is moved forward."
Parliament's inquiry was launched in March and a number of U.S. politicians, telecoms industry insiders and technology experts were interviewed.
In concluding that "concern about Huawei is therefore based on clear evidence of collusion between the company and the Chinese Communist Party apparatus," lawmakers pointed to a number of points made by those who testified.
The U.K.'s National Cyber Security Center said earlier this year that Huawei is a high-risk vendor because it's a Chinese company that could — under China's National Intelligence Law of 2017 — "be ordered to act in a way that is harmful to the UK."
Under this law, Chinese firms appear compelled to "cooperate with the state intelligence work." That could mean handing over data to Beijing. Huawei had denied that it would ever do this.
During the inquiry, Andre Pienaar, founder of venture capital firm C5 Capital, said the Chinese government has helped finance Huawei.
In an article in December, the Wall Street Journal detailed how Huawei has received around $75 billion from loans, credit lines and other incentives.
"It is clear that Huawei is strongly linked to the Chinese state and the Chinese Communist Party, despite its statements to the contrary," the U.K. Parliament's defense committee said.
But lawmakers cautioned the West not to "succumb to ill-informed anti-China hysteria" and urged the U.K. and its allies to recognize "the mutual benefits of Chinese involvement in our economy."
"The UK, and allies, should ensure that decisions taken around the involvement of Chinese companies are taken in an evidence-based manner, and only when risk is demonstrable should decisions around removal be made."