Huawei is failing to convince the UK it can be trusted

London(CNN Business) UK officials have delivered a harsh rebuke to Chinese tech giant Huawei by raising new concerns over its engineering work and questioning the company's commitment to security.

The Huawei Cyber Security Evaluation Centre, which monitors the company's activities in the United Kingdom, said it has identified another round of "significant technical issues" with Huawei's engineering.

In its annual report, the watchdog also said that Huawei has failed to address security issues raised last year, leading it to provide "only limited assurance" that risks from Huawei equipment already deployed in Britain can be managed.

It states that it would be "difficult" to manage risks from future Huawei product deployments unless the company's software engineering and cyber security processes are fixed.

The report, which includes input from UK intelligence agencies, could make it more difficult for Huawei to convince the UK government and mobile operators that its products should be used in new superfast 5G networks.

Huawei has pushed back hard against repeated US claims that using its telecommunications equipment exposes countries to potential spying by the Chinese government.

The company denies the accusations, and has called on the Trump administration to provide evidence to back up the allegations. It has challenged a ban on federal agencies buying its products in US court.

Huawei, which is the world's largest supplier of telecoms equipment, said Thursday that it has already launched a $2 billion program aimed at resolving the security issues raised by the United Kingdom.

"We understand these concerns and take them very seriously," a Huawei spokesperson said.

The UK watchdog said its report that the security issues raised are about "basic engineering competence" and "cyber security hygiene," and could be exploited by any number of actors.

It said it does not believe the defects identified "are a result of Chinese state interference."

It also said that Huawei must do more to resolve the issues. The watchdog said it "has not yet seen anything to give it confidence in Huawei's capacity to successfully complete" its transformation program.

Even more problematic for the Chinese company are concerns raised by the UK watchdog over its commitment to security.

The panel cites security commitments first made by Huawei in 2012 — and later repeated — that it said the company has not followed through on.

"Strongly worded commitments from Huawei in the past have not brought about any discernible improvements," the watchdog said.

The report could influence a separate UK government review of telecoms equipment suppliers being carried out as mobile providers prepare to build next generation 5G networks.

BT (BT) said in December that it would not buy Huawei equipment for the core of its 5G network. Vodafone (VOD) said Thursday it had taken note of the report and welcomed government efforts to "understand and manage" risks.

The European Union asked its member states earlier this week to conduct 5G risk assessments, acknowledging there were concerns over Huawei. It stopped short, however, of the blanket ban sought by the United States.