If you thought a change in presidential administrations would result in the federal government taking a softer stance on Hikvision and Dahua, the world’s two largest video surveillance equipment manufacturers, then you would be mistaken. If anything, the Biden administration has ratcheted up the pressure on these companies and could further hamper their U.S. operations.
In March, the Federal Communications Commission (FCC) placed Hikvision and Dahua, along with three other companies – Huawei, ZTE Corp. and Hytera Communications Corp. – on a list of companies deemed as threats to national security. Later this month, the FCC will discuss a proposed rulemaking change that would allow the agency to prohibit all future authorizations of equipment provided by the entities on this co-called “Covered List” as well as potentially explore the possibility of revoking authorizations previously granted for other products from these firms.
If passed, these rule changes would not only have major ramifications for the U.S. operations of Hikvision and Dahua, but it could also significantly impact other manufacturers who use OEM products from the two firms.
In a statement provided to SecurityInfoWatch (SIW), Dahua said it is aware of the FCC’s rulemaking notice and is closely reviewing it.
“We intend to provide a robust response, demonstrating to the FCC this rule making is unwarranted in regard to Dahua Technology. As we have consistently maintained, our company’s products are not deeply integrated into U.S. telecommunication networks, but are rather edge services like countless connected TVs, computers, mobile phones and other “smart” devices that are manufactured all around the world and used by American consumers and businesses,” the statement read. “More importantly, our company does not and never has represented any type of threat to U.S. national security. We are a private sector business, traded on the public markets. We serve our shareholders, customers and employees - not the interests of any government. We look forward to working through this rule making process to clear the record on these critical topics and will remain committed to our customers in the U.S. as always.”
When reached for comment, a Hikvision spokesperson referred SIW to the statement issued by the company when they were initially placed on the “Covered List” in March.
“Hikvision strongly opposes this decision by the Federal Communications Commission and is weighing all options on how to best address this unsubstantiated designation. Hikvision does not belong on a list for next-generation networks,” the statement read.
The potential actions of the FCC are just the latest in a string of punitive measures undertaken by Congress and the White House against the two surveillance juggernauts, which initially began with the passage of the National Defense Authorization Act (NDAA) in 2018 that included an amendment that bans federal agencies from purchasing surveillance equipment from Hikvision, Dahua and Hytera.
After the NDAA went into effect in the summer of 2019, the U.S. Department of Commerce in October of that year placed the companies on its “Entity List” along with 26 other Chinese governmental and commercial organizations, effectively prohibiting U.S.-based businesses for exporting their products to the named organizations.
Just a month later, former President Donald Trump signed an executive order prohibiting U.S. companies and individuals from investing in Hikivsion as well as other companies previously identified as having links to the Chinese military. Last week, President Joe Biden amended this investment blacklist by adding nine additional companies. Hikvision was still included on the list and placed along with Huawei within a new subsection labeled, “Surveillance Technology Sector of the Economy of the PRC.”
“With no justification for previous lists, the U.S. Government keeps finding creative ways to continue targeting Hikvision simply because we happen to be headquartered in China,” a spokesperson for Hikvision told SIW in a statement. “As a publicly-traded, global company, and the largest manufacturer of security products, we remain focused on our mission to partner with industry peers to help protect people and their property.”
SIA Expels Dahua
On a related note, the Security Industry Association earlier this month announced that it is terminating Dahua’s membership in the organization citing the organization’s commitment to the ethical use of security technology, however; they did not divulge what specifically the company had done to run afoul of its’ ethics policies. Here is the SIA statement in its entirety:
The Security Industry Association has reaffirmed its commitment to supporting the responsible and ethical uses of security technology.
In July 2020, SIA implemented its Code of Ethics and required all new and renewing members to affirm that they will abide by the provisions of the code. SIA regards the code as a baseline for ethical behavior and encourages members to go above and beyond those standards in their operations.
In accordance with the Code of Ethics and the policies and procedures accompanying it, the SIA Board of Directors has terminated the membership of Dahua Technology. Under the terms of SIA’s ethics policy, any company whose membership has been terminated may apply to be reinstated after a period of one year.
SIA’s enforcement of its ethics policy is an ongoing process. The SIA Executive Committee and Board of Directors will continue to review all additional cases brought before it in a consistent and unbiased manner.
SIW reached out to SIA for clarification as to why Dahua was expelled and if the organization was also reviewing the membership of Hikvision but a spokesperson said they are not providing comment beyond the aforementioned statement to its members.
In a statement provided to SIW, a spokesperson for Dahua said the association told the company the foundation for its decision was based on the fact that the video surveillance manufacturer was placed on the aforementioned "Entity List," which the company characterized as "dubious" and warned that the move "sets a dangerous precedent for the industry." Here is Dahua's statement in its entirety:
The SIA’s decision to remove Dahua from the association for alleged failures to comply with its Code of Ethics was wrong. It was wrong on substance and the decision was reached through a deeply flawed process, and most importantly, lacked evidentiary basis. The SIA argued to us that the foundation for its decision is the fact that Dahua is on the U.S. Entity List. This strikes us as dubious for a number of reasons:
First, the decision to put our firm on the Entity List took place in 2019, yet the SIA never indicated to us that this status would prevent our continued membership. We paid our 2019, 2020 and 2021 dues and participated in the SIA activities during this period with no direct or indirect message from the SIA that our membership was at risk due to the government’s action.
Second, the Entity List by itself does not provide grounds to expel us from the association. The Entity List is not a ban on our operations in this market nor does it represent a fact-based assessment of our company’s operations. There is no due process associated with its compilation. Our company respects the right of the U.S. government to regulate its market as it sees fit. However, SIA faces no legal or regulatory risk that we know of from allowing us to continue to be a member.
Third, the action of the SIA was not based on any evidence-gathering effort. The SIA’s board claims that we are failing to meet its Principles, yet offers no proof to substantiate that charge beyond the reporting of a single outlet that brought the complaint against our company in the first place. That outlet has clearly expressed its views about our company and plainly wishes to see us banned from the market. But the fact remains that its core allegations against us are false.
For the SIA to expel Dahua without any fact-gathering sets a dangerous precedent for the industry with consequences that could go far beyond our particular business. It forecloses our ability to work with the SIA and our fellow industry members at a time when collaboration is arguably more important than ever.
As disappointing as this decision is, it does not materially impact our ability to continue to operate and provide solutions and tools that are making the world safer and more secure for our customers and for communities across America and around the world. We will continue to focus on this mission and meet the evolving needs of our customers and partners.
Earlier this year, IPVM reported that a software development kit published on Dahua’s website included code that could be used by Chinese authorities to track Uyghurs, a minority ethnic group, leveraging its facial recognition analytics. The report drew the ire of federal lawmakers and even prompted Sens. Marco Rubio (R-Fla) and Bob Menendez (D-N.J.) to send a letter to outgoing Amazon CEO Jeff Bezos asking him to provide details about the e-commerce leader’s business dealings with the company. Last April, Amazon reportedly purchased 1,500 thermal cameras from Dahua to help the company monitor the temperature of workers amid the ongoing Covid-19 pandemic in a deal valued at approximately $10 million.
“These reports are extremely disturbing and show that the comprehensive surveillance system that Chinese authorities have deployed against the Uyghurs is just as bad as we had feared, if not worse,” the Senators wrote in the letter.
About the Author:
Joel Griffin is the Editor of SecurityInfoWatch.com and a veteran security journalist. You can reach him at [email protected].