Chinese telecom giant Huawei Technologies Co. faced another setback in its bid to participate in Costa Rica’s 5G network, after a court rejected Huawei’s lawsuit against the country’s Ministry of Science, Innovation, Technology and Telecommunications (MICITT), ruling that the company poses a threat to its national security and public interest.
In August 2023, the Costa Rican government issued an executive order barring companies from non-signatory countries of the Budapest Convention from participating in its 5G network. The convention, signed by 68 countries, establishes a multinational legal framework to combat cybercrime and foreign infiltration. China is not a signatory.
Beijing strongly opposed the order, and Huawei filed a lawsuit against MICITT, arguing that the restriction had harmed its business, violated international agreements, and constituted unfair competition. The company sought to have the ban overturned.
Public interest above corporate gains
Costa Rica’s Court of Administrative and Fiscal Disputes dismissed Huawei’s appeal, saying Huawei failed to present evidence demonstrating substantial financial loss due to the order, according to reports from La Nación and Central Noticias. The government prioritizes user privacy and national security, placing public interest above corporate gains, the reports said.
MICITT also alleged that Huawei had attempted to manipulate the 5G bidding process through illicit means to gain an unfair advantage. The ministry stated that barring companies from non-signatory countries is not discriminatory nor a violation of international agreements but necessary to protect users’ privacy, telecommunications security, and prevent foreign infiltration of its 5G network.
Over the past decade, Huawei has faced allegations of securing 5G contracts through bribery and fraud. In December, Costa Rican President Rodrigo Chaves publicly accused Huawei’s general manager in Costa Rica, a Chinese national, of colluding with former officials of the state-owned Costa Rican Electricity Institute (ICE) to rig contract bids and secure additional budget through improper means.
There were reports that at least 70 ICE officials had attended lavish banquets hosted by Huawei, and 17 were even flown to China on sponsored trips.
“The most audacious and large-scale scandal ever in Costa Rica’s history”
Chaves condemned the case as “the most audacious and large-scale scandal ever in Costa Rica’s history.” The Costa Rican government has filed criminal charges against Huawei’s general manager and implicated former officials, accusing them of fraud, bribery, and financial misconduct.
Costa Rica established diplomatic relations with China in 2007 after severing its ties with Taiwan. However, relations with Beijing have become increasingly strained in recent years.
During a visit to Costa Rica in early February, U.S. Secretary of State Marco Rubio praised the country for barring Huawei from its 5G network, calling it a “model” for Latin America and the world in defending digital sovereignty and economic security.
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