Tribunal to review Canada’s deal with partially Chinese state-owned company for X-ray scanners

A woman wearing a face mask to help protect against the coronavirus walks past the Canadian Embassy in Beijing, Thursday, Aug. 6, 2020. AP Photo/Mark Schiefelbein

Editor’s note: This article has been updated to clarify the ownership and founding of Nuctech.

The Canadian International Trade Tribunal (CITT) says it is reviewing a contract between the federal government and Nuctech that would see the partially Chinese state-owned security company install and run X-ray scanners in Canada’s embassies around the world.

In a statement emailed to Global News on Wednesday, CITT confirmed it is conducting an inquiry into the procurement, and said it was prompted by a complaint filed by KPrime Technologies.

Read more: Canadian minister promises review after security contracts awarded to Chinese-state tech company

Global News reached out to KPrime Technologies — which had also submitted a bid for the contract — to determine the nature of the complaint, but did not hear back by time of publication.

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The CITT says the tribunal only conducts an inquiry after receiving and accepting a complaint.

According to the statement, the tribunal’s reviews are “limited by law to determining whether a procurement was conducted in compliance with the Government of Canada’s obligations pursuant to various major applicable trade agreements.”

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The Tribunal “considers issues such as whether bids were evaluated fairly and according to the stated terms of the procurement process itself,” according to the CITT website.

In July, Ottawa posted details of the Nuctech deal, which would see the Beijing-based company install X-ray scanning equipment and software in 170 Canadian embassies, consulates and high commissions worldwide.

According to the National Post, which first reported on Nuctech’s new deal with Global Affairs Canada, the July 2020 contract has an estimated value of $6.8 million.

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Documents do not confirm that figure, but confirm a “contract award date” of July 15.

Global News found that since 2017, Nuctech has been awarded four border security and customs warehouse contracts valued at $6.5 million to provide scanners and lab equipment to Canada Border Services Agency (CBSA), according to procurement documents.

This is despite mounting concerns among some national security experts about Nuctech’s growing access to sensitive facilities worldwide.

Nuctech, which was headed by the son of former Chinese President Hu Jintao for several years, has accumulated a number of sensitive airport and border security infrastructure contracts around the world.

According to the Nuctech website, the company has customers in 160 countries.

However, Nuctech has also garnered criticism over alleged corruption in its business dealings in Africa.

And after news of the deal broke, Canada’s Foreign Affairs Minister Francois-Philippe Champagne promised to review the “standing offer” from the company.

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“We are currently looking into the offer with Nuctech Company to provide some security screening equipment in our missions abroad,” Champagne said in a statement.

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Champagne said he had also directed officials at Global Affairs Canada to review its purchasing practices regarding security equipment and to “continue reviewing the security of our missions around the world.”

In a statement emailed to Global News, a spokesperson for Nuctech said the allegations made against the company and its system are “inaccurate” and “intentionally obscure facts and delegitimize the transparent and fair tender process” of Public Works and Government Services Canada.

“We trust that the current CITT process will adjudicate fairly and will find that the complaint from our competitor, specifically the false information provided about Nuctech, is without merit,” the statement reads.

— With files from Global News’ Andrew Russell, Sam Cooper and Amanda Connolly

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