US House Passes Bill Banning Gov Use of Dahua and Hikvision

UPDATE August 2018: The bill has now been signed into law.

The US House of Representatives has passed H.R. 5515, a bill that includes a ban on the US government's use of Dahua and Hikvision. This follows growing US awareness that Hikvision is owned and controlled by the Chinese government plus last year's disclosure of Dahua's backdoor, Hikvision's backdoor and Dahua device's global hacking attacks.

Bloomberg has also reported on this ban applying to Dahua and Hikvision.

Update: The WSJ has confirmed the passing of the House bill banning Dahua and Hikvision.

Vote / Poll

Impact

The minimal impact is increased recognition and publicity of Chinese video surveillance manufacturer risks. If this becomes law in the next few months, the direct impact to Dahua and Hikvision would be moderate, as they primarily supply SMB based on low cost. However, Hikvision specifications have been increasing inside the US government (e.g., 1, 2, 3). Moreover, both Dahua and Hikvision are increasing their emphasis on enterprise and government sales with thermal cameras and AI.

The most significant impact might be indirect, as companies like ADT, Stanley, Tyco / JCI, Honeywell, UTC, etc. that OEM or resell Dahua and Hikvision may become nervous to be associated with government banned manufacturers. While SMBs typically care more about price than security, many are likely to be uncomfortable with a brand that the US government has deemed insecure.

Bill Details

The Dahua and Hikvision ban was added to the bill and adopted:

Inserting the following language (from the amendment):

The other company mentioned, Hytera, is most closely a competitor to Motorola, now the owner of Avigilon. Motorola sued Hytera for IP theft in 2017.

Risky Technology

The bill summary explained [link no longer available] the rationale for these bans is for risky technology associated with the Chinese Communist Party:

Hikvision's Chairman is a Communist Party Secretary and recently joined the Chinese national government.

Ban Details

The bill text explains the ban [link no longer available]:

Includes White Labels / OEMs

The bill also includes white labels / OEM

This would have a significant impact on the US video surveillance business as Dahua and Hikvision are the two largest OEMs of video surveillance products (see Dahua OEM Directory and Hikvision OEM Directory).

Outcome Unclear

Hikvision is very well organized and has been preparing for such battles for some time, most recently with the hiring of the ex-Herbalife PR director who has experienced dealing with crisis and legal action by the US government. Moreover, Hikvision, this January, hired one of the top lobbyists in DC, Reginald Brown. We expect Hikvision to vigorously contest this action.

Update August 2018: US Congress Passes Bill Banning Dahua and Hikvision. The bill is now expected to become law, even Hikvision admits.

Update May 2018: Hikvision Responds

A day after the bill was passed, Hikvision USA response confirms:

As expected, they say they will vigorously fight it:

Hikvision's ultimate problem is that they cannot even attempt to deal with the far more central matter - their ownership and control by the Chinese government.