The President of Brazil wanted to ban Huawei, but the country’s politics and business community opposed it. Now he, the National Security Advisor, and others are studying the possibility of banning Huawei by presidential decree, which could lead to a fierce legal battle.
According to a Dec. 8 Reuters report, Brazil is seeking legal action to exclude Chinese firm Huawei from participating in the construction of a 5G network, two sources said. According to the sources, a presidential order is being studied by both Augusto Heleno, Brazilian President Jair Bolsonaro’s national security adviser, and the Brazilian National Communications Regulatory Agency (ANPE), which is responsible for regulating security provisions for telcos and equipment manufacturers.
One of the sources who was able to review the presidential order said: “The Brazilian National Communications Agency needs a source of law to establish rules for the 5G spectrum auction…. But a directive from the President’s National Security Advisor would not be enough, so they expect a presidential order to support any ban on Huawei.”
Industry representatives said such a presidential order could spark a legal battle with the telco. For telcos that already use Huawei equipment, the government’s ban would force them to spend a lot of money replacing their equipment, which is why they are so opposed to banning Huawei.
Brazil’s rules, enacted in March, require companies to guarantee the reliability of data, allow their systems to be audited, and also require them to work with equipment suppliers in their geographic area. But there is no way to exclude Huawei from this rule.
Another source noted that the government is considering excluding vendors that are not listed on São Paulo’s BOVESPA exchange in order to block Huawei, but that doing so would affect other companies as well.
The source warned, however, that a rule targeting only Huawei so as not to affect other companies might not be legally defensible: “A rule that restricts only one company, in the absence of reasonable justification, would not stand up in court. He said: “This would not only slow down the pace of technological development, but also affect Brazil’s trade relations with China in other areas.”
Huawei goes deep into Brazil’s telecom infrastructure
According to Reuters, Bosonaro followed his ally, U.S. President Donald Trump, in opposing Huawei on the basis of a lack of evidence, claiming that Huawei shared data with the Chinese Communist Party. But because China is Brazil’s largest trading partner, Bossonaro’s claim faced opposition both within the government and within the domestic industry, with even Vice President Hamilton Mourão not supporting it.
Huawei products have been used by most of Brazil’s telecoms operators since they installed their 3G and 4G networks. According to the lobby group Conexis, Vivo, Brazil’s largest cell phone company, which is owned by Telefônica Brasil, uses Huawei products for 65 percent of its network. Other telecom companies such as Claro, Oi and TIM use Huawei products in 55%, 60% and 45% of their networks, respectively.
Huawei says that they have been operating in Brazil for 22 years, using the highest specifications of international data security standards, no different from what the company does in 170 other countries around the world. Huawei has also started testing 5G equipment in Brazil with all telecom companies. Huawei said in a statement, “We hope that all decisions will be made based on rigorous technology, in a non-discriminatory manner, and in the interest of the free market.
Brazil had originally planned to execute a 5G spectrum auction next June, but the legal battle may delay that plan and thus push back the country’s 5G network transition even further.
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