The government's spy agency, GCHQ, is to increase its scrutiny of Chinese telecom giant Huawei amid fears that the firm is spying on the UK by compromising its equipment.
The Chinese telecoms firm, which has flourished on a global scale in recent years, has been constantly in the spotlight for its alleged association with the Chinese government - a link that it has denied.
This hasn't stopped a host of Western countries from suspending a number of contracts with the equipment provider, including Australia and Canada, while a US committee deemed the company a "national security threat".
In July, after being urged by the Intelligence Security Committee (ISC) to look into Huawei's involvement in the UK, Whitehall said it would review Huawei's Cyber Security Evaluation Centre (HCSEC or the Cell), which is based in the UK, and would report its findings.
National security adviser Sir Kim Darroch carried out the review, and recommended that GCHQ and Huawei formalise certain working practices such as the provision of equipment and code from the Chinese company to the Cell.
The report said that GCHQ should "lead and direct senior appointments (in consultation with Huawei), in particular through chairing the selection panel".
But Darroch said that staff at the centre should continue to be employed by Huawei for compliance purposes.
"Although the fact of HCSEC staff being employed by Huawei appeared to create conflicts of interest, it was, in reality, the best way of ensuring continued complete access to Huawei products, codes and engineers, without which HCSEC could not do its job," the report said.
"In particular, were HCSEC staff not to be Huawei employees, access arrangements would be complicated by Huawei's non-disclosure agreements with its hundreds of third-party suppliers.
"Also, there would be a possibility of commercial risk or even liabilities for the taxpayer were GCHQ, in effect, to impose themselves between Huawei and the UK telecommunications market," the report added.
Huawei said it was "pleased that the model of the UK government, the telecom operators and Huawei working together in an open and transparent way has been recognised as the best approach for providing reassurance on the security of products and solutions deployed in the UK."
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