China's Nuctech surprised at its elimination in Lithuania, minister keeps mum

VILNIUS – Nuctech, a Chinese state-owned security inspection products company, has expressed its surprise at the recent decision by the Lithuanian governmental commission vetting deals by strategic enterprises to block it from a tender called by the country's airport operator, Lietuvos Oro Uostai (Lithuanian Airports, LOU) due to threats to national security.

Representatives for the company are asking for a possibility to provide explanations before the final decision is made. Lithuanian Transport Minister Marius Skudis has refused to comment on the situation.

Last week, the commission concluded that the Nuctech deal on the installation of X-ray baggage scanning equipment at Lithuanian airports runs counter to national security interests.

The move was later welcomed by the US ambassador. Meanwhile, the Chinese Embassy said the decision was politically motivated and would be non-beneficial for Lithuania.

COMPANY: WE FOLLOW EU RULES

In a commentary sent to BNS, Robert Bos, deputy director general at Nuctech Netherlands, said the company has not received any official notification from the Lithuanian government yet, adding that the grounds for such a decision remain unclear for the company.

"Nuctech has always been committed to a transparent dialogue with its partners and government institutions. We have been operating in Europe for 17 years, and no data or security incident has ever been reported by any of our customers," the company representative said.

According to the company, the scanners proposed by Nuctech to the Lithuanian airport operator are produced in the EU at its fully integrated factory near Warsaw in Poland "under the strictest applicable EU and national performance and safety standards".

The company says Nuctech Warsaw, the bidder in the present tender, "is subject to and has always fully complied with Lithuanian, Polish and EU laws and regulations, not to the laws of any third country, including China".

The decision to block Chinese equipment was made by the government commission that includes representatives of various institutions. The commission's decision would be soon submitted to the Cabinet.

Transport Minister Marius Skuodis has refused to comment on the situation so far.

"I am sorry but the minister won’t provide any wider comment on this issue that has to do with national security interests," his spokeswoman Gabrielie Vasiliauskaite told BNS.

SECURITY CONCERN

Lietuvos Oro Uostai (Lithuanian Airports, LOU), the state-owned operator of Lithuania's three international airports, and Laurynas Kasciunas, chairman of the parliamentary Committee on National Security and Defense, asked the governmental commission to look into whether the Chinese investment was in line with Lithuania's national security interests.

Kasciunas then warned that Nuctech's screening equipment at airports can collect data on passengers and baggage, which would be available to Chinese intelligence and security services under Chinese law.

The Wall Street Journal reported last June that US agencies had launched a campaign agent Nuctech's operations in Europe. 

"A campaign led by the National Security Council and a handful of US. agencies is trying to rally European governments to uproot Nuctech Co., a well-connected Chinese state-controlled company whose screening systems for cargo, luggage and passengers are becoming a fixture at ports, border crossings and airports across Europe," the newspaper wrote.

Critics say that Nuctech's "extreme low-level pricing strategy" suggests that its motives are not commercial but rather "an interest to control strategic EU infrastructure and data driven knowledge", according to the article. 

Lithuania's intelligence agencies warned in a report last year that "China’s pursuit of technological advantage and its penetrating investment activities increase the vulnerability of other states and pose the risk of losing control over the critical infrastructure".