On Wednesday, the Lithuanian government decided to bar China's state-controlled Nuctech from supplying X-ray scanning equipment to the country's airports over national security concerns.
"The government's decision is that the deal is not in line with national security interests," Rasa Jakilaitienė, the prime minister's spokeswoman, told BNS.
The cabinet held a special meeting earlier on Wednesday to discuss a conclusion by a governmental commission vetting deals by strategic enterprises that the installation of Nuctech's baggage screening equipment at airports would not meet national security interests.
The document has not been made public. Nuctech bid for a contract to install luggage scanners at Lithuanian airports.
Lietuvos Oro Uostai (Lithuanian Airports), the state-owned operator of Lithuania's three international airports, and Laurynas Kasčiūnas, chairman of the parliamentary Committee on National Security and Defence, asked the governmental commission to look at whether the Chinese investment was in line with Lithuania's national security interests.
Kasčiūnas then said that Nuctech's screening equipment can collect data on passengers and luggage, which could be available to China's intelligence and security services under Chinese law.
Nuctech has dismissed the allegations, saying the equipment it offers to Lithuania is produced in Poland "under the strictest applicable EU and national performance and safety standards".
The Wall Street Journal reported last June that US agencies had launched a campaign against 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 C., 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.
Read more: Beijing calls Lithuania's block of Chinese tech at airports 'politicised'
Lithuanian airports to look for alternatives
Lithuanian Airports will not sign a contract with Nuctech, the top bidder, following the cabinet's decision, Tadas Vasiliauskas, spokesman for the state-owned airport operator, told BNS.
"They submitted the best offer and were ranked first. Today's government decision is clear; the contract will not be signed," he said. "In the near future, we will analyse alternatives for the purchase of this equipment."
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