(Jan 15): The US pressured Italy to cancel government contracts with Chinese security equipment supplier Nuctech over national security concerns, according to people familiar with the matter.
Washington made formal diplomatic complaints to Italy last year in an effort to nullify the results of tenders worth about €20 million for scanning machines used by Italian customs officials, said the people, who spoke on the condition of anonymity.
US diplomats took the issue directly to the office of Prime Minister Giorgia Meloni, according to the people. The American concern is that images acquired at customs ports could be accessed by Chinese authorities, jeopardising both US and Italian national security.
The American pressure highlights Meloni’s efforts to balance Italy’s massive trading relationship with Beijing while not running afoul of directions from Washington to limit Chinese exposure. China’s trade surplus with the European Union (EU) has widened to a record approaching US$300 billion.
Meloni is visiting Japan and South Korea this week and next in an effort to strengthen commercial ties.
Spokespeople for the Italian government, the Italian customs agency and the US State Department declined to comment. A representative from Nuctech said the company wasn’t aware of any discussions between the governments.
See also: Iran avoids US strikes for now with pledge against executions
“All data generated by our security equipment belongs to our customers who retain full control over it,” the Nuctech representative said in an emailed statement. “Our equipment in Europe fully complies with the EU standards on personal data protection, electronic privacy, circulation of non-personal data and cybersecurity.”
The US has added Nuctech to its so-called Entity List, designating it a national security threat. The EU separately launched an investigation into Nuctech last month, saying it unfairly benefits from state subsidies. The company faces restrictions or bans in Lithuania and Belgium.
Italian officials told the US that it wasn’t possible to cancel the tenders because it would create legal risk as well as possible diplomatic problems with Beijing, according to the people. The officials said they would weigh the American concerns ahead of the next tender.
See also: Greenland and Denmark readying for key meeting to assuage Trump
The government in Rome has since introduced restrictions on public tender laws, giving preference to bidders headquartered in Italy or in Nato or Nato-allied countries.
The US has long pressured its European partners to limit China’s influence, including in public procurement. In the case of the Meloni government, that’s become even more relevant in the wake of Rome’s departure from Chinese President Xi Jinping’s signature Belt and Road initiative in 2023.
In a separate situation, Italy’s Pirelli & C SpA sidelined Sinochem representatives to its board last year, declaring the Chinese company no longer had control. The move came following pressure from the US, where the company generates more than 20% of its sales.
The Italian government is seeking to shrink Chinese shareholding in its key companies, including Pirelli.
Uploaded by Felyx Teoh
