By Inés Suárez | 2025-01-17

SAN JOSÉ -- Evidence that China-based malicious cyber actors have infiltrated Costa Rica's networks is the latest impetus for restrictions on Chinese telecom companies.

In late December, a thorough review of the country's communication infrastructure -- conducted in collaboration with the United States -- uncovered the presence of "malicious actors based in China."

"The review revealed intrusions by cybercriminal groups based in China targeting Costa Rica's telecommunication and technology systems," said a joint declaration by the Costa Rican Presidency and the US Embassy in San José, published on X December 17.

This discovery occurred amid growing tensions between the Costa Rican government and the Chinese company Huawei, following an alleged corruption case cited by President Rodrigo Chaves.

On December 11, Chaves filed a criminal complaint against Huawei and former officials of the Costa Rican Institute of Electricity (ICE) for crimes against the Costa Rican treasury.

"This may be one of the most blatant and significant corruption scandals we’ve witnessed in this country, and this government will not ignore such matters. It deeply pains me; this issue has implications beyond our borders, but we will not shy away from confronting situations of this nature," Chaves said at a news conference after submitting the formal complaint.

Huawei is pursuing contracts to build 5G networks and supply related equipment to Costa Rica.

A Huawei party

In late May, ICE fired one of its own senior officials for attending a Huawei-hosted party in San José in April, which more than 70 ICE officials attended.

Huawei has been one of ICE's primary suppliers in recent years.

Relations between Costa Rica and Huawei have chilled since Chaves signed a decree in August 2023 that requires companies seeking Costa Rican contracts for 5G network construction and equipment to come from signatory countries of the Budapest Convention on Cybercrime.

The Budapest Convention, which took effect in July 2004, is the first international treaty designed to standardize legislation across countries to combat cybercrimes and internet-related offenses.

While Costa Rica is a signatory, China is not.

In his decree, Chaves called companies using equipment from non-Budapest Convention signatories a source of "high risk" to cybersecurity.

He raised concerns about potential "state-sponsored intrusions through the 5G supply chain" and the ability of "a foreign government" to manipulate software and hardware providers.

Huawei is pursuing legal action so that it may bid for Costa Rican contracts.

The Chinese company has sought to block implementation of Chaves' decree by filing an appeal for protection, which the Constitutional Court rejected.

Additionally, Huawei has requested precautionary measures from the Administrative Litigation Court, which has temporarily suspended ICE tenders.

Chaves emphasized that his government "will not back down" on enforcing the decree, which he stated is designed to protect the data and information of both companies and individuals.

Numerous accusations

Numerous European countries, Canada and the United States have blocked Chinese firms like Huawei from participating in their telecom networks.

Huawei has faced international accusations of espionage, with its close ties to the Chinese government fueling concerns that the company could be used for state-sponsored espionage.

Since Huawei is a major supplier of telecom equipment, including 5G networks, Beijing could exploit its technology to intercept communications or conduct cyberattacks.

Among the allegations against the Chinese multinational is that Huawei installs "back doors" in its equipment, enabling the Chinese government to access sensitive data.

Additionally, critics have accused the company of stealing technology from American and European firms.