Nuctech’s equipment has been banned in the United States since 2014 due to national security concerns, but has been widely embraced in Europe in recent years. 26 of 27 EU member states have installed devices from the Chinese company, revealed Thursday from research from AP news agency.
Only Lithuania, which has lost diplomatic ties with China since opening a Taiwanese embassy, does not do business with Nuctech. In the Netherlands, customs use Chinese machines to scan containers, baggage, aircraft freight, mail and parcels from distribution centers.
Very unwise and naive, says Tom Berendsen, who sits in the European Parliament on behalf of the CDA. “This is incomprehensible. You should not cooperate with a Chinese company in the field of border security. It is about vital infrastructure and very sensitive personal and cargo data.”
According to Berendsen and fellow MEP Bart Groothuis (VVD), the dependence on China is too great. “Nuctech has donated equipment to European tenders and combines deliveries with cheap Chinese government loans. That is not an economic, but a strategic model,” says Berendsen.
Almost all Nuctech scanning equipment for the European market is produced in the Polish capital Warsaw. The sales office is located at the Wilhelminakade in Rotterdam, where Nuctech also conducts research and development.
‘No grip on’
Robert Bos, deputy general manager of Nuctech in the Netherlands, rejects all allegations of Chinese government espionage. “Our equipment creates scan images of suitcases or containers. These are on the machine itself and our customers determine what happens with them, we have no control over that. It is our technology, but their information.”
The Nuctech director emphasizes that his scanners ‘nine times out of ten’ are not part of a network and are therefore used ‘standalone’. Dutch customs confirmed that last year to the Ministry of Justice and Security, appeared from parliamentary questions on the matter. This made it clear that the scanners that are not used ‘stand-alone’ are connected to the customs office on the Maasvlakte by means of a closed fiber optic network.
Ties to China
Still, the ties between Nuctech and the Chinese government are undeniable. The company was founded in 1997 by professors from Beijing Tsinghua University and for many years was led by Hu Haifeng, the son of former president Hu Jintao.
Today Nuctech is part of the listed company Tsinghua Tongfang. The majority shareholder of that company is the investment arm of CNNC (China National Nuclear Corporation), which is in fact a state-owned company and part of the defense industry in China.
“We have never exchanged any information with China,” says Bos. “I have been working for Nuctech for ten years now and can say that there is no accountability from Europe to the Chinese government. It is true that shares are owned by a state-owned company, but that also happens in other countries. Apparently, people get a different feeling with the Chinese government.”
Ronald Prins, cybersecurity expert and owner of security services provider Hunt & Hackett, doesn’t think the Chinese government needs back doors. “They hack themselves completely blankly, they don’t have to adapt equipment for that. But if there is that suspicion, one has to search and then you will also find such a back door. Then such a supplier can really pack and in Europe never sold anything again.”
Nuctech suspects that commercial interests play an important role in the criticism it receives. The company says that it always adheres to all European laws and regulations when tendering. Nuctech’s competitors are complaining about its low bids, cheap maintenance contracts and favorable loans, according to AP.
Bos: “We are a commercial company, everything goes through tenders, the rules of which are fixed. We sometimes win them on price, but our competitors often enough too. People make assumptions, but I think they are purely commercial interests.”
Meanwhile, the pressure on member states to stop doing business with Nuctech is growing. “We must do everything we can to ensure that safety equipment in important sectors is made by European companies in the future,” said MEP Berendsen. “We will have to help those companies to grow.”