Huawei Technology Links to Israel Source of U.S. Concern

China‘s exten­sive ties to Israel‘s tech­nol­o­gy indus­try were treat­ed on June 2 by an inves­tiga­tive report in the Wall Street Jour­nal that specif­i­cal­ly cit­ed Huawei‘s local sub­sidiary, Toga Net­works, which has report­ed­ly been oper­at­ing in the coun­try over the past sev­en years.

Inter­est­ing­ly, Huawei does not offi­cial­ly rec­og­nize Toga as a sub­sidiary, although Toga is iden­ti­fied as a unit of the com­pa­ny by Israeli gov­ern­ment doc­u­ments and patents attrib­uted to Huawei engi­neers work­ing under the aus­pices of Toga.  Toga spe­cial­izes in telecom­mu­ni­ca­tions net­work­ing, stor­age, infor­ma­tion secu­ri­ty (encryp­tion) and tools that allow ser­vice providers to inspect data mov­ing through their routers (a func­tion nor­mal­ly used to pri­or­i­tize traf­fic, but that can also be employed to iden­ti­fy peo­ple vis­it­ing cer­tain web­sites or key­words in emails).

Toga‘s hir­ing prac­tices raise even more con­cerns, as many of the company‘s engi­neers pre­vi­ous­ly served in elite Israeli army units focused on inter­cep­tion and encryp­tion tech­nol­o­gy.  The com­pa­ny report­ed­ly offered high­ly com­pet­i­tive com­pen­sa­tion pack­ages — often­times dou­bling the going mar­ket rate — and, accord­ing to cur­rent and for­mer employ­ees, more than 200 ulti­mate­ly moved on to Huawei.

The issue of tech­nol­o­gy trans­fers from Israel to Chi­na has been a source of nation­al secu­ri­ty con­cern in the past, with the U.S. occa­sion­al­ly direct­ly inter­ven­ing in espe­cial­ly sen­si­tive cir­cum­stances.  More recent­ly, Wash­ing­ton has expressed con­ster­na­tion over the increas­ing involve­ment of Chi­nese com­pa­nies (i.e., Aliba­ba, Baidu and Xiao­mi) in the devel­op­ment of sen­si­tive tech­nol­o­gy inside Israel.