In some of the world’s most sensitive locations, security measures are now in place. A single Chinese firm makes the device with significant ties to China’s military and the ruling Communist Party’s highest levels.
It all hinges on Nuctech technology, which has quickly risen to the top of the global cargo and vehicle scanners market. The World Economic Forums in Davos, Europe’s main ports, airports from Amsterdam to Athens, and NATO’s border with Russia all have Nuctech equipment.
While Nuctech has been barred from entering the United States for years due to national security concerns, its equipment has been installed in 26 of the EU’s 27 member states. The Associated Press examined public, government, and company procurement data throughout the EU.
An increasing number of Western security professionals and lawmakers are worried that China could use Nuctech equipment to destroy vital transit points or obtain unauthorized access to government or industry data or individuals from goods traveling through their devices.
The Chinese government has effectively financed Nuctech to eliminate competitors and give Beijing the ability to influence crucial infrastructure in the West.
“The data being processed by these devices is very sensitive. It’s personal data, military data, cargo data. It might be trade secrets at stake. You want to make sure it’s in the right hands. You’re dependent on a foreign actor which is a geopolitical adversary and strategic rival,” said Bart Groothuis, director of cybersecurity at the Dutch Ministry of Defense, before becoming a member of the European Parliament.
The ownership structure of Nuctech and its global expansion has generated concerns on both sides of the Atlantic.
Nuctech disputed the concerns, claiming that the company’s activities in Europe complied with local regulations, including comprehensive privacy testing and data privacy rules.
“It’s our equipment, but it’s your data. Our customer decides what happens with the data,” said Robert Bos, Nuctech’s deputy general manager in the Netherlands, where the business operates a research and development facility.
Critics fear that, under China’s national intelligence law, Nuctech will be unable to reject orders from Beijing to divulge sensitive data about commodities, people, and equipment traveling through its scanners.
They claim there’s a chance Beijing might leverage Nuctech’s position across Europe to collect massive data on cross-border trade flows based on information pulled from local networks as shipping manifests. In a dispute, passengers’ data may be transferred, or business may be disrupted. Airports in London, Amsterdam, Brussels, Athens, Florence, Pisa, Venice, Zurich, Geneva, and more than a dozen more across Spain have all signed agreements for Nuctech equipment, procurement, government papers, and corporate announcements.
The company also develops explosives detectors and networked devices capable of facial recognition, body temperature monitoring, and detection of identification cards or tickets, in addition to systems that scan persons, luggage, and products.
Robert Bos, deputy general manager of Nuctech’s research and development facility in the Netherlands, said, “The equipment is ours, but the data is yours. It’s our equipment, but it’s your data. Our customer decides what happens with the data.”
Nuctech has been linked to the Chinese regime and academic and military interests since its inception.
Tsinghua University, an outstanding public research university in Beijing, founded Nuctech as a division. It expanded with Chinese government support and was led for many years by the son of former Chinese President Hu Jintao.
Datenna, a Dutch financial intelligence firm focusing on China, mapped Nuctech’s ownership structure, uncovering dozens of large corporations spanning four stake tiers, including four state-owned enterprises and three government entities.
Tongfang Co., which owns 71 percent of Nuctech, is the company’s largest shareholder today. Tongfang’s major shareholder is China National Nuclear Corporation’s investment arm.
One of these vehicles, the National Military-Civilian Combined Industrial Investment Fund, declared in June 2020 that it wanted a 4.4 percent ownership in Nuctech’s largest shareholder and the right to designate directors to the board of directors.
According to Qichacha, a Chinese business information website, CNNC owns a 21 percent investment in Nuctech and a more than 7% holding in the fund. According to records, Chen Shutang, a member of CNNC’s Party Leadership Group, and the company’s chief accountant serves as fund manager.