Last-minute concession to telecoms firms after Chinese criticism of new law

The Government has granted a last-minute concession to telecoms groups whose equipment may be banned from Irish networks for national security reasons, in a move that follows heavy Chinese criticism of the new measures.

Minister of State for Communications Ossian Smyth has tabled new amendments to draft laws for debate in the Seanad on Tuesday, which will introduce sweeping powers for Ministers to force certain companies off Irish infrastructure because of security risks.

The amendments will have the effect of removing the damaging tag “high-risk” vendor from any company hit by the restrictive measures, using instead the neutral expression “relevant” vendor.

The replacement of negative language in the official designation of a target company may make it easier for those hit by the restrictive measures to try to limit the fallout in other parts of their business.

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Any telecoms bans handed under new laws are supposed to be confidential. Still, the “high-risk” designation could be deployed by rival groups against target companies. That negative designation would also make it more difficult to sell other company products.

[ Huawei ban could cost €700m, business lobby group claims ]

The measures are set out in draft legislation – the Communications Regulation and Digital Hub Development Agency (Amendment) Bill of 2022 – which cleared all stages of Dáil debate in January.

The Seanad committee and remaining stages debate are scheduled on Tuesday, the last phase of parliamentary scrutiny before the Bill is sent to President Michael D Higgins to be signed into law.

Official documents for that debate, circulated on Friday evening to politicians, include a list of Government amendments that would delete 29 references to “high-risk” vendors from the legislation. In all but two cases, the amendments would substitute that expression with the word “relevant”.

But the draft law still contains intrusive powers that the Government could use to force groups such as Huawei of China from the telecoms system, without any need to publicly document the reasons once national security is cited.

[ Washington halts licences for US companies to export to Huawei ]

Such laws are perceived to be aimed at the Huawei, a telecoms giant based in Shenzhen, China. The Irish legislation, which is in line with European moves to tighten telecoms security, follows a US ban in November that was imposed on equipment made by Huawei and three other Chinese groups because of “unacceptable” security risks.

The Government has always insisted the power to ban certain groups is neither company-specific nor country-specific. But Huawei itself and Eir, which uses its equipment, believe the former is the target of the Irish legislation.

China’s embassy in Dublin has said the new law could harm the country’s growing economic ties with Ireland.

Digital Business Ireland, an industry lobby, claimed in a November letter to Mr Smyth that any bans could impose costs of up to €700 million on the sector and force some companies to rebuild their digital platform from scratch.

It will be an offence with a prison term of up to five years for anyone to breach orders to keep a ban confidential.