U.K. Said to Prepare Tougher Rules on Huawei, Avoid Full Ban

Britain is set to toughen the rules under which Huawei operates in the country while stopping short of an outright ban on the equipment maker, according to Bloomberg, citing people familiar with the matter. The measures are expected to involve closer state oversight and may restrict the vendor from some sensitive parts of the U.K.’s telecom networks, said the people.

The results of a six-month review of Britain’s telecom supply chain were submitted to the National Security Council chaired by Prime Minister Theresa May. Officials will spend coming days working through the details before announcing a final decision. May’s office declined to comment on a report that she had decided to allow Huawei to build parts of the new generation of wireless networks known as 5G.

Western allies are watching. Britain has monitored Huawei’s systems closely for several years, while allowing it to become a major supplier of U.K. communications infrastructure. “We welcome reports that the U.K. government is moving towards allowing Huawei to help build the UK’s 5G networks,“ a Huawei spokesman said in an email. “While we await a formal government announcement, we will continue to work cooperatively with the government and the industry.“

The issue has divided U.K. government departments, with some officials pushing for tough restrictions and others concerned this would saddle the industry with extra costs and delay infrastructure upgrades, the people said. Speaking during a session of the Treasury Select Committee, Chancellor of the Exchequer Philip Hammond said that "where our security experts tell us that there are ways in which we can maintain security, whether its of networks or of installations, that avoid the most economically costly outcomes, then we should look very carefully at those options.