The economics affairs ministry's draft would prohibit what it calls high-risk tech by 2030, with the infrastructure and software used in the 5G network required to be risk-free by 2024.

This would include from manufacturers located outside the EU and also NATO and OECD member states – Huawei is a Chinese firm – within Estonian communications networks.

According to Huawei, the economic impact of the draft communications regulation has not been realistically assessed for its economic impact and, according to a legal analysis commissioned by the company itself, the draft contains a number of issues related to the Estonian Constitution, EU law and World Trade Organization (WTO) rules, the company said in a press release.

"We understand and acknowledge the intention of the Estonian government to improve the level of network security," Ben Chang Bin, CEO of Huawei Technologies Estonia, said.

He continued: "We welcome all impartial and fact-based cyber security requirements with clear and verifiable technical standards and transparent approval procedures that cannot be identified in the current draft."

Huawei said that, according Finnish law firm AVANCE's senior economist Petri Rouvinen, banning and replacing Huawei equipment in communication systems could cause damage to the Estonian economy in the sum of €167.6 million, or more than €120 per Estonian citizen.

The ban on Huawei will lead to excessive costs and economic losses of €426-769 million for the removal of equipment and the introduction of new equipment, according to the company.

Sten Luiga, a senior partner at the law firm COBALT who advises Huawei on the draft regulation and its explanatory memorandum, identified a number of problems related to the Constitution, EU law and international trade.

"Huawei will continue to explain its arguments to government agencies, because we have a great vision for Estonia, we want to develop and grow together with Estonia. I would be happy to see the first 6G call in Estonia. It would also be a great honor to involve local digital startups in the global market and ecosystem that our activity in more than 170 countries allow," Ben Chang Bin said. "We are asking the government to review the draft regulation."

The draft regulation, according to which the use of solutions by manufacturers located outside the European Union, NATO and OECD member states in Estonian communication networks is prohibited, would abruptly suspend the cooperation of telecommunications operators with Huawei, as its head office is located in China.

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