Romania bans Huawei from involvement in 5G network in June 2021

Context

On June 11, 2021, Romanian President Klaus Iohannis signed a bill into law that banned Chinese-controlled companies from involvement in Romania’s 5G infrastructure. This bill cited “risks, threats or vulnerabilities to national security” as justification, and also included a requirement for any 5G suppliers to be subject to the opinion of the Supreme Defense Council chaired by the country’s president.

The broader context of this law is Romania’s close geostrategic alignment to the US, reflected in their 2019 joint memorandum in which the two sides agreed that “as part of a risk-based security approach, careful and complete evaluation of 5G vendors is necessary”.

Impact

This measure impacted Huawei, and also potentially other Chinese firms such as ZTE. During the legislation process, the head of Huawei in Romania, George Zhang, stated that its impact could include the closure of Huawei’s business operations in the country, with the loss of 9.2 billion to the economy and “thousands” of local jobs.

Responses

(i) Chinese Government and Industry Responses

During earlier debate of this legislation, in November 2020, the Chinese Embassy in Romania called on Bucharest to “independently make objective and fair decisions”, in an apparent reference to alleged US influence. The same embassy spokesperson was quoted in Chinese state media as saying that “[w]e resolutely oppose the abuse of the concept of ‘national security’ to violate market laws and the principle of fair competition, exclude specific companies in specific countries, and block scientific and technological cooperation without factual basis and conclusive evidence.”

In February 2024 Romania’s Supreme Defense Council denied a request for Huawei to be authorised as a supplier. Huawei responded to this ruling, with a spokesperson saying that “[w]e (Huawei) are disappointed with the government’s decision, which is not rooted in any objective assessment or actual findings”, adding “Huawei has operated in Romania for over 20 years without any security issues and fully complied with all national rules and regulations”, and claiming that “[t]his decision will harm our business operations in the country, and as well have a far-reaching negative impact on the ecosystem of local ICT industry and business operations of our partners.” Subsequently, in April 2024 Huawei initiated legal proceedings against the Romanian government to challenge this decision.

(ii) Romanian Government and Industry Responses

According to reporting, Romania’s telecommunications providers have deadlines to replace existing Huawei products in its core network by 2026, and by 2028 in the remainder of its network.  

Status

At time of writing, it is unclear if legal proceedings are still ongoing, but Huawei is currently barred from involvement in Romania’s 5G infrastructure.

Key Takeaways

This is an example of a small state initiating trade weaponization under geopolitical pressure from its senior NATO ally, the US. It is also an example of how China is increasingly utilising the domestic legal system in the imposing country to challenge measures against it.

References and Further Information

AFP. 2021. “Romania approves law to potentially exclude Huawei from future 5G network.” Euronews. April 16. Available at: https://www.euronews.com/2021/04/16/ romania-approves-law-to-potentially-exclude-huawei-from-future-5g-network

Chang, E. 2021. “Romania bans Huawei from its 5G network.” Taiwan News. June 14. Available at: https://www.taiwannews.com.tw/news/4222923

Dumitrescu, R. 2024. “Tech Huawei sues Romania after being denied authorization for 5G infrastructure”. Romania Insider. April 10. Available at: https://www.romania-insider.com/huawei-sues-romania-authorization-5g-2024

Global Times. 2020. “China highly concerned about Romania’s Huawei 5G ban, hoping it to make independent, fair decision.” November 5. Available at: https://www. globaltimes.cn/content/1205778.shtml

Lipscombe, P. 2024. “Huawei sues Romanian state after 5G networks snub.” Data Center Dynamics. April 12. Available at: https://www.datacenterdynamics.com/en/ news/huawei-sues-romanian-state-after-5g-networks-snub/

Morris, I. 2024. “Vodafone, Orange face 5G rip-and-replace as Romania bans Huawei.” Light Reading. March 4. Available at: https://www.lightreading.com/5g/vodafone-orange-face-5g-rip-and-replace-as-romania-bans-huawei

Reuters. 2021. “Romanian president signs bill into law to ban Huawei from 5G.” June 12. Available at: https://www.reuters.com/business/media-telecom/romanian-president-signs-bill-into-law-ban-huawei-5g-2021-06-11/