Chinese equipment installed in Serbia is being reviewed in the EU and banned in the USA

Nevertheless, from the first contract between Serbia and Nuctech, in 2009, until today, this technology magnate, specialized in the field of security, has been followed by numerous controversies.

As of 2020, the company is on the "blacklist" of the United States.

Nuctech is also present in the countries of the European Union, where more than 50 members of the European Parliament asked the European Commission to exclude the company from the tender for security reasons.

The call for caution was expressed due to fears that the Chinese authorities have access to travel and commercial information of other countries through Nuctech.

Nuctech has close ties to China's top leadership, and its parent company is controlled by the state-owned China National Nuclear Corporation (CNNC).

 

Why and where are mobile scanners installed in Serbia?

The police announced on October 29 that Chinese mobile scanners were installed at the Gradina border crossing, on the border with Bulgaria.

In the statement, the Ministry of Internal Affairs (MUP) did not mention the name of the Chinese company, but in the attached photos of the MUP, it can be seen that they are Nuctech vehicles.

The announcement of the Ministry of Internal Affairs also did not specify the value of the donation.

"Using these scanners will enable more efficient detection of illegal goods, as well as people who are illegally transported in heavy motor vehicles," the statement said.

This donation normally comes at a time of increased police control of border crossings, after three migrants were killed and one was wounded in a shootout on the northern border of Serbia with Hungary at the end of October.

Serbia is located on the so-called "Balkan route" through which migrants fleeing war and poverty pass on their way to the EU.

 

The Ministry of the Interior did not respond to questions from Radio Free Europe (RSE) about the details of the donation, as well as whether the manufacturer meets safety standards.

 

 

At least 50 out of a total of 750 members of the European Parliament in 2022 sent a letter to the European Commission warning that placing Nuctech equipment on European borders would threaten national security

Namely, according to Politico magazine, the reason for this was the question of how the member states spend a fund of one billion euros for the equipment of customs controls of the European Union.

"The use of EU funds to further strengthen Nuctech's presence in Europe's critical infrastructure presents a unique opportunity for the company and the Chinese government to collect sensitive customs data that could be harmful to the commercial and security interests of EU member states," the 2022 letter said. reports Politico.

The main initiators and signatories of the letter are, among others, the liberal group "Renew Europe" Bart Grotes (Groothuis). This MEP is the former head of cyber security at the Dutch Ministry of Defence.

French Nathalie Loiseau, who is also the president of the Subcommittee on Security and Defense in the European Parliament, is also a signatory.

The immediate reason for the warnings was the agreement of the Strasbourg airport with the company Nuctech.

In a statement to Reuters on October 17, 2022, Liberal Bart Grotesz explained that his main concern is that "this government-owned company is bound by the Intelligence Act of 2017."

The aforementioned law allows the Chinese government to demand business information from technology companies under the pretext that it is important to state intelligence.

 

RSE asked the European Commission what security threats are when it comes to the use of Nuctech equipment at borders and airports, as well as whether the EU has introduced new criteria in response to concerns about the use of Nuctech technology.

The European Commission stated that they cannot comment on individual companies, but that they have taken "a series of measures" that should guarantee the safety of customs control equipment used in the EU.

"Security requirements should be properly represented in the criteria for selection and award (of work) and should take precedence over other criteria, such as price," the response to RSE states.

Also, the European Commission states that the member states themselves are responsible for the procurement of equipment.

Looking at the publicly announced EU tenders, it can be seen that Nuctech won two tenders during 2023. It sold baggage scanning equipment to the airport in Genoa, Italy, and a mobile X-ray scanner was sold to Poland.

 

Brake for Nuctech in Lithuania and Belgium

The Lithuanian government has blocked the delivery of Nuctech's airport baggage scanning equipment in 2021, Reuters reported at the time.

In a response to RSE, the Ministry of Defense of Lithuania states that the Government announced in February 2021 that the planned agreement of Lithuanian airports with Nuctech represented a "threat to national security due to the company's connection with government institutions of the People's Republic of China".

"This decision is based on the conclusions of the Coordinating Commission for the Protection of Facilities of Importance to National Security, which is the national body responsible for screening investments and acquisitions in sectors of strategic importance. The courts later rejected Nuctech's request to annul the government's decision," they stated in response.

Also in the answer to RSE, they say that Lithuania has amended several acts on public procurement so that it can reject bids if the supplier or the person controlling them is from a country that is "not considered reliable".

This year, Belgium also decided to exclude Nuctech from the tender for the supply of X-ray scanners for the control of vehicles and containers at customs.

The Minister of Finance of Belgium decided to invite only selected companies to make an offer, and Nuctech therefore filed a complaint with the Supreme Administrative Court in Belgium (Council of State), reported The Brussels Times.

The State Council of Belgium, upon RSE's request, sent a verdict in which it is stated that that institution rejected Nuctech's appeal, referring to the protection of "national security".

 

The company Nuctech did not answer RSE's questions about all the accusations that follow it in the EU and the USA, as well as about the details of arrangements and donations to Serbia.

 

Blacklisted in the US, warnings from Canada

The company Nuctech, as stated in the public registry of the United States Government, was placed on the "blacklist" in 2020 for "participation in activities contrary to the national security interests of the United States."

"Nuctech's less efficient equipment undermines US efforts to combat the illegal international trade in nuclear and other radioactive materials," according to a statement on the US Register website.

It is also added that "equipment of lower performance means less strict cargo inspection".

Former US Secretary of State Mike Pompeo later said in a separate statement that the country would use "all available countermeasures" to prevent Chinese companies and institutions from using US goods and technology for "malicious purposes".

The Canadian government also noted in its 2020 report that when it came to the acquisition of Nuctech equipment, security scanners could potentially be used to secretly collect and transmit information, Voice of America reported.

According to the media, that year Nuctech won a contract to sell equipment worth $6.8 million to 170 Canadian embassies and consulates around the world, which was later canceled.

Introducing facial recognition technology at the Digital China Exhibition, Fuzhou, May 8, 2019.

 

 

The issue of security and transparency in Serbia

Ana Krstinovska, researcher of the non-governmental organization China Observers in Central and Eastern Europe (CHOICE), tells RFE/RL that one should be careful when it comes to donating scanners to Serbian customs.

Krstinovska points out that governments in the region should take into account what kinds of "gifts" are offered to them and whether they should accept and use them.

"(The question is) whether (the scanners) are equipped with controversial technology that can collect and track data related to the movement of goods and passengers. Tightening regulations in China that require companies to share such data with the government if asked to do so , is the reason why Nuctech equipment is banned in some countries," says Krstinovska.

She reminds that Serbia made the first purchase of scanners with the company in 2009, which can also be seen in the data on Nuctech's website.

"At that time, neither Nuctech, nor that kind of Chinese donation of equipment or loans, were considered controversial. The Chinese side's motivation was rather to promote their domestic companies, to help them penetrate the European market and secure further contracts," she states.

By the end of 2020, around a thousand cameras will be installed in 800 locations in Belgrade.

Also, according to data from its website, Nuctech donated equipment to Serbia in 2020 to fight the pandemic.

In addition to donations from the Chinese company, Serbia also bought equipment from Nuctech.

As can be seen from the publicly available information, since 2014, it borrowed from the Chinese Export-import Bank in order to purchase the "Container/Vehicle Inspection System Project" from that company.

He pays those loans even now. In the budget of Serbia for this year, it is stated that the loan will be paid until 2025, and currently, Nuctech still owes 8,631,474 euros for the equipment.

According to Ana Krstinovska from China Observers, cooperation with Nuctech in this sense opens up the issue of transparency of the arrangement.

"What is quite unique to China, and also worrying, is the use of loans that are tied to Chinese companies and suppliers. The loans are eventually paid back. These are not gifts or investments, but taxpayers' money, so there should be an appropriate procurement procedure in order to choose the best offer with the relation of price and quality," she says.

Serbia has repeatedly bought Chinese equipment and services without a tender, referring to the interstate agreement it has with China.

 

Cooperation between Serbia and China

Although Serbia is a candidate for membership in the European Union, it has developed cooperation with China. For years, the officials of the two countries have emphasized that they are bound by "steely friendship".

China also provides Serbia with political support. For Serbia, the most significant thing is that China did not recognize Kosovo as an independent state.

Due to the strengthening of cooperation with China, Serbia has repeatedly suffered criticism from Western countries.

The purchase of Chinese technology and the question of the safety of its use has been in the focus of the public in Serbia several times.

Since 2017, the Ministry of Internal Affairs has signed a contract with the company Huawei on the introduction of camera systems for the "Safe City" project.

 

As part of it, cameras were purchased for facial recognition and identification of citizens in public places. Huawei technology is considered controversial in the West from the point of view of violation of human rights and citizens' privacy.

RSE's research showed that Chinese-made "smart" cameras have been introduced in more than 40 cities and municipalities across Serbia. A disproportionately large number of them were also installed in smaller towns where the number of inhabitants is measured in the hundreds.