COSCO, the world’s largest shipowner by fleet size, has rejected allegations that its commercial vessels are being used to collect military intelligence for Beijing.

The response followed a Reuters report citing two senior US administration officials who believe COSCO ships carry concealed signals-intelligence equipment capable of intercepting military communications near coastlines in North America, Europe and Asia.

COSCO said the claims were false and without foundation. The Chinese state-controlled group said communications, navigation, safety and operational systems installed on its vessels are used only for commercial purposes, including navigation safety, ship-to-shore communications and emergency response.

The company also denied that any onboard equipment is used to intercept military communications or gather intelligence. COSCO said it reserved the right to take legal action to protect its reputation.

The two US officials cited by Reuters did not identify specific vessels or disclose what equipment was allegedly involved.

US national security concerns involving COSCO have surfaced previously. In the late 1990s, members of Congress raised intelligence and security concerns over a proposed COSCO terminal lease at the former Long Beach Naval Station. The Clinton administration said the project did not pose a security threat.

After COSCO acquired Hong Kong shipping group OOIL, US authorities required OOIL to sell the Long Beach Container Terminal. The $1.78 billion divestment was completed in 2019 under a national security agreement.

Also in 2019, the US sanctioned two COSCO tanker units over Iranian oil trades. VLCC rates rose sharply following the measures before the sanctions were partly lifted several months later.

More recently, the Pentagon added COSCO to a list of companies it considers linked to China’s military. USTR also targeted Chinese shipping and shipbuilding with port fee measures last year, with those measures potentially returning this autumn.