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The US Congress agency monitoring PRC human rights has cited IPVM's coverage of Hikvision's extensive Xinjiang activities in its flagship annual report.
The report, which mentions Hikvision almost two dozen times, urges further US government action on the Xinjiang human rights crisis, calling for even tougher sanctions on companies "directly complicit".
In this post, we examine the report's citing of IPVM along with its broader impact, including:
Yesterday the Congressional-Executive Commission on China (CECC) released its 2019 report to the Congress and the President, which is the bipartisan agency's main purpose. While the report covers issues like Tibet and the Hong Kong protests, Xinjiang received heavy coverage as well - Uyghur activists even attended the report's release:
In total, the CECC report mentioned Hikvision almost two dozen times, indicating the firm has become the one of the most visible symbols of Chinese government surveillance/rights abuses. In one passage, the CECC even used Hikvision as an example of businesses being complicit in "egregious human rights violations":
Tiandy Called Out As Well
The CECC mentioned Tiandy three times for selling "technology to Chinese authorities", stating "the government uses this technology to surveil rights advocates and others the government views as threats." The Tiandy mention is due to a Bloomberg report noting that Tiandy's founder is now a billionaire.
CECC Recommends Magnitsky Sanctions
Without mentioning Hikvision explicitly, the CECC recommended Global Magnitsky sanctions on companies "directly complicit" in Xinjiang:
Impose Global Magnitsky sanctions on both Chinese government officials carrying out severe human rights abuses in the XUAR as well as the companies directly complicit in those abuses.
Magnitsky sanctions are much tougher than the current sanctions in place against Hikvision; if passed, they would terminate Hikvision's USA presence altogether.
More Export Controls Urged
The CECC also recommends updating the ban on US firms selling China "crime control" equipment that was passed after the Tiananmen Square massacre. This would make it much harder for US companies to supply any Chinese surveillance firms, not just the ones sanctioned over Xinjiang like Hikvision/Dahua.
Hikvision Declines Comment
Hikvision told IPVM they decline to comment on the CECC report.
Conclusion
The CECC report is bad news for Hikvision, indicating that the company has become a prominent example of PRC government surveillance in Xinjiang; notably, Dahua was not even mentioned in the report although it also has extensive Xinjiang activities.
More broadly, if the report's recommendations are acted upon, even further restrictions on US business with Chinese security companies could very well be placed in the future. Considering these issues are anchored in human rights rather than technical/cybersecurity concerns, they are unlikely to go away anytime soon.
I'm trying to understand the Magnitsky Sanction part (Wikipedia link). Here's what I'm getting:
The Magnitsky Sanctions ban the subject from entering the United States or using the U.S. banking systems, effectively freezing their assets.
Magnitsky Sanctions are usually applied to individuals (it has been likened to punishing the Nazi prison staff). However, when Dan Gertler was sanctioned, many of his affiliated entities were listed as well.
Senator Marco Rubio and several other senators called for Magnitsky Sanctions against Chinese officials involved in Xinjiang in August 2018.
If only Hikvision executives were sanctioned (and the company itself was not), I haven't a clue how that would affect things.
Hi, thanks for your comment. That's a good question. IPVM covered this last year and, as we mentioned, Magnitsky sanctions on the company are very serious and would effectively end Hikvision's USA operations and probably cause issues with their international operations too. Why? Magnitsky sanctions mean:
A freeze on all Hikvision assets – from property to cash – in the United States
A prohibition on Hikvision transactions with US persons/companies
Possible suspension of Hikvision executives’ right to obtain visas to the US
If only Hikvision executives were sanctioned, the impact wouldn't be nearly as severe, and would amount to more of a PR problem. However, that specific option has never been floated before. And the Magnitsky legislation is clear that companies as well as persons can be sanctioned.
I value the actual research John is doing, he puts a lot of effort into making this information available and I think that we need that today. We know the installers and end-users aren't finding this information on their own.
Next time you're at a business that has Hikvision cameras installed ask them what they know about it, in my experience it is next to nothing. One business in particular, Mike's Carwash to be precise, merely covered up the Hikvision logo after we asked them about it!
Good question, but the likelihood of Magnitsky sanctions on Hikvision is very difficult to predict. The President/Congress are under no obligation to act upon the CECC's suggestions. My (subjective) guess is that this unless we see a significant escalation in US-China tensions, or a substantial worsening of the (already very bad) Xinjiang situation, this option remains unlikely although still possible.
I think it's much more likely that Magnitsky sanctions are first imposed on Chen Quanguo, the PRC official in charge of Xinjiang, and his direct associates.
From various conversations I had last year, I think there was some moderate, if not significant, part of the day-to-day security industry population that felt Hikvision was going to avoid any long-term impacts from the sanctions and scrutiny. It seems there was an opinion that felt Hikvision was "too big to fail" in a way, and through lobbying/etc., would get through this, maybe weakened and chastised a bit, but more or less in tact.
The pressure not only seems to be not letting up on them, but is increasing, or at least maintaining strong momentum. By extension, I think we may start to see some increases in R&D spending and new product releases at other security industry companies that have clawed back some revenue and margin now that they do not need to compete so directly with Hikvision, et al.
Overall, I think that 2020 will be a potentially good year for any security industry product that is not built around Huawei components.
Validation such as being cited by a government report that addresses human suffering must be a very rewarding aspect of IPVM's effort. That's the kind of reward not even money, or Mastercard, can buy. Congratulations, John.
