5G technology promises to be truly revolutionary. Not only will it make communications virtually
instantaneous, but it has the potential to unlock the ‘Internet of Things’. 5G could
connect super high-speed internet, with almost no time lag, to physical objects
so that they can be remotely controlled or even work autonomously. This could
include anything from home appliances to robotics with potential military
application such as autonomous vehicles or drones that can collaborate with
each other. The technology will also control train signals, traffic lights, and
power supplies. However, as the technology advances, the possibilities increase
for a hostile actor with access to the network to cause severe disruption.Recently, concerns have been expressed about
companies based in China investing in critical 5G infrastructure around the
world. The main fear is that Chinese companies could be compelled by their “State”
to build backdoors into software that would allow Chinese intelligence services
to access and control data for espionage and sabotage operations.The
USA is actively lobbying its allies to block Chinese companies on national
security grounds, specifically Huawei and ZTE—the CIA recently shared intelligence
that Huawei has received funding from Chinese State security. Australia, New
Zealand and Japan have already banned Huawei from critical telecoms
infrastructure. And just last [Mat1] month, the UK decided
to ban
Huawei from core parts of its 5G network.
Ambassador Robert L Strayer, US Deputy Assistant
Secretary for Cyber and International Communications and Information Policy, argues that China is not a liberal democracy in which the
government is restrained in the exercise of its authority by the Rule of Law.
In China, so the argument goes, the government can effectively direct any
company to follow its orders at any time. The company has no option but to
comply as there is no independent judicial process to appeal to. In his words,
companies in China are subject to the ‘extrajudicial command of the Communist
Party’.A quick survey of Chinese law tells us that these
Rule of Law concerns are not without merit. Under Article 7 of the National Intelligence Law:Any organisation and citizen shall, in
accordance with the law, support, provide assistance, and cooperate in national
intelligence work, and guard the secrecy of any national intelligence work that
they are aware of.Article 14 then emphasises that the intelligence services
may demand support, assistance and cooperation. The
Intelligence Law suffers from a distinct lack of clarity regarding its key
terms. Most notably, there is no precise definition of ‘intelligence work’. Rather,
the Law refers to extremely broad activities such as ‘safeguard[ing]
national political power’ and ‘other major interests of the State.’ Additionally,
the geographic scope of the Law is not defined, indicating that all
subsidiaries of Chinese headquartered companies, located anywhere in the world,
may fall under the Law. All Chinese citizens, wherever they reside in the
world, may fall under the Law.In short, a company based in China could, at least
in theory, be compelled to assist the intelligence services with vaguely
defined operations and to keep such assistance secret. There is no precedent of
companies refusing to comply with the intelligence services because, as one
Chinese lawyer told the Financial Times, there is no legal recourse to
appeal against a request: ‘China does not have such a litigation path’.This is all in stark contrast to states benefiting
from a more robust Rule of Law. For example, in the USA, tech companies have
been able to win
appeals against
requests from the Department of Justice. Furthermore, American intelligence
gathering laws define key concepts in detail and set out extensive limitations on the government’s powers.The
key question that emerges from these discussions is whether certain Rule of Law
deficiencies can justify restricting investment on national security grounds.
While China is currently under the spotlight, similar concerns could easily
arise in relation to other authoritarian regimes. Indeed, the USA adopted a
similarly firm approach to a Russian
tech company.The Bingham Centre for the Rule of Law* recently organised an event in which a panel of experts from various jurisdictions discussed FDI screening and national security—particularly the new EU-wide FDI screening framework and the UK’s proposals for its own regime. The panel underlined the importance of ensuring that FDI screening regimes are themselves compliant with Rule of Law principles and that national security is not abused as an excuse for other policy objectives, such as protectionism. Thus, restrictions should be applied in a neutral fashion that does not arbitrarily discriminate against investors from particular countries. Restrictions should only be imposed where specific security risks are identified, based on publicly available assessment criteria; restrictions should be proportionate to the identified risks; and the lawfulness of decisions should be subject to judicial review.This author would agree that decisions to restrict
FDI must be made in a way that is compatible with the Rule of Law. However, concerns
over Chinese companies and 5G are not just protectionist discrimination. Legitimate
national security concerns would apply to investors from any state where the
government is not subject to the Rule of Law and has unconstrained authority
over organisations and citizens. In such cases, the risk of permitting control
over critical infrastructure is probably too great. As NSA cybersecurity
adviser Rob Joyce put it, allowing companies under the control of
authoritarian regimes to design the 5G network, is like ‘asking the burglar to
build your house’.
The opinions voiced in this post are the author’s alone and do not in any way reflect those of the Bingham Centre for the Rule of Law.
