Dahua, Hikvision, Huawei US Ban Rules Released

By: John Honovich and Charles Rollet, Published on Aug 08, 2019

The US government has released rules on how the 2018 NDAA ban of Dahua, Hikvision, and Huawei will be implemented when it takes effect in 5 days.

Dahua, Hikvision, Huawei US Ban Rules Released

While the release of the rule itself has been widely reported, the actual details within the rules have not. Inside this note, we examine the 44-page rules document, addressing key question such as:

  • Why this ruling covers video surveillance products that contain Huawei Hisilicon chips
  • How solicitations that are already open or are part of an existing contract are handled
  • Why commercial off the shelf products will not be exempted from the ban
  • How contractors will need to pledge no banned equipment is provided
  • How the limited waiver process works
  • How violations will be reported
  • What penalties exist for violating these rules

Context

This interim Federal Acquisition Regulation applies to section (a)(1)(A) of Section 889 of the NDAA - there is no rule yet for the 'blacklist' clause, which has been spun off and will be implemented one year from now. It is an 'interim' rule because it has not been published in the Federal Register yet. (CORRECTION: this is not accurate, as the rule is now on the Federal Register, but remains "interim". The "interim" moniker refers to the fact that the rule remains open for minor suggestions for 60 days, see below).

Once in the Federal Register, "interested parties" may submit suggestions for changes within a 60-day period. (Such modifications are typically minor - major changes would need "a supplemental proposed rule", the Federal Register's website states.)

Huawei HiSilicon Included

Products using Huawei HiSilicon chips are covered as section 4.2101 defines the ban to include:

Hisilicon's SOCs ("System on a chip") are an essential component of IP cameras and NVRs that use them as they host the operating system and core code necessary to run the camera. Below is an image example of Hisilicon chips on a Honeywell camera:

Get Notified of Video Surveillance Breaking News
Get Notified of Video Surveillance Breaking News

honeywell use hisilicon

This will have a significant impact but should come as no surprise to those following the details. For example, this is consistent with what the Congressional committee which drafted the NDAA told IPVM last December:

“If a company has an end item with Hisillicon chips that they sell to anyone, they will be unable to do business with the federal government.”

Many manufacturers, beyond Dahua and Hikvision, use Huawei Hisilicon chips. For example, China's third-largest manufacturer Uniview generally uses Hisilicon. Many lower-end Hanwha cameras were using Hisilicon but Hanwha is now in the process of phasing them out. Most 'cheap' or inexpensive cameras use Hisilicon, etc. One notable exception is Avigilon who says they do not use any Hisilicon.

We would expect the US Security Industry Association (SIA) to fight this, as many of their manufacturers profit greatly from low-cost Hisilicon chips. However, claiming that SoCs are not 'necessary for the proper function or performance' of a video surveillance device is simply technologically wrong. On the other hand, they have done this before when they successfully campaigned for IP cameras to lose Buy America protection by arguing that 'IP cameras are capable of being employed without using the lens and image sensor'.

COTS Items Included

The rule states that "it is in the best interest of the Government to apply this rule to contracts for theacquisition of COTS items" [commercial off-the-shelf items], citing an "unacceptable level of risk":

Most video surveillance products bought by the US government are 'COTS' in that they are widely commercially available (e.g. Axis, Dahua, Hanwha, Hikvision IP cameras, etc. are widely sold online).

Open Solicitations and Ongoing Contracts

Contractors must include an NDAA notice - which discloses banned equipment - for all "solicitations issued on or after August 13".

Even if the government requested solicitations before the 13th, if the contract is awarded afterwards, the notice must be included:

Even with ongoing contracts, the NDAA notice must be included, barring further procurement of covered products:

Pledge Not Supplying Banned Items

In their NDAA notices, contractors must pledge not to supply covered equipment:

Note: while the line above says 'telecommunication', the FAR itself defines video surveillance as part of 'covered telecommunications equipment' (see excerpt image).

If they are including covered equipment, contractors must report it to the contracting officer or, for DoD contracts, directly to the DoD website:

Contractors must also disclose key details about the covered equipment, including whether "the entity was the OEM or a distributor":

Waivers

Waivers allowing contractors to supply covered equipment are obtainable "on a one-time basis" from "[federal] agency heads".

However, these waivers can only be granted if there is a "compelling justification for the additional time [necessary] to implement" the NDAA ban and the contractor submits a "phase-out plan":

The only other way to get a waiver is if the Director of National Intelligence "determines the waiver is in the national security interests of the United States".

Penalties

Generally, violating Federal Acquisition Regulations carries consequences such as "cancel[ing] the procurement" and "disqualify[ing] an offeror"; serious violations can even be referred to "appropriate criminal investigative agencies."

4 reports cite this report:

Hikvision Global News Reports Directory on Oct 17, 2019
Hikvision has received the most global news reporting of any video surveillance company, ever, ranging from the WSJ, the Financial Times, Reuters,...
IFSEC Report: US Ban Hurting Hikvision In Europe on Sep 04, 2019
Prominent UK publication IFSEC Global has issued a new report finding that US bans are impacting the purchase of 'Chinese' products, most notably...
How To See If Your Camera Uses Huawei Hisilicon Chips on Aug 30, 2019
Rarely do manufacturers disclose what SoCs (System on a Chip) they use, even though it is the core of IoT devices. Interest in this has increased...
Ban of Dahua and Hikvision Is Now US Gov Law on Aug 13, 2018
The US President has signed the 2019 NDAA into law, banning the use of Dahua and Hikvision (and their OEMs) for the US government, for US...
Comments (23) : PRO Members only. Login. or Join.

Related Reports on Acquisition

Motorola Acquires Watchguard, Adds to Vigilant And Avigilon on Jul 15, 2019
2 years ago, Motorola had no position nor relevancy to video surveillance. Now, they own major video surveillance, LPR and body camera providers...
ADT Eliminating Acquired Brands, Unifying Under 'Commercial' Brand on Jun 14, 2019
ADT is eliminating the brands of the many integrators it has acquired over the past few years, including Red Hawk, Aronson Security Group (ASG),...
OpenALPR Doubles Prices on Jun 06, 2019
There is no 'race to the bottom' in cloud / AI video surveillance. In May, Verkada increased their prices. Now, OpenALPR is doing the same with a...
"New" Arecont Fixes Failures "Without A Fight" on Jun 05, 2019
The "old" Arecont was infamous not only for its camera failures but for making their "partners" fight to get them fixed. IPVM drew the ire of...
Pelco Sold Off, Now Independent on May 28, 2019
Pelco has been sold off by Schneider Electric, completing Schneider's terrible tenure, but giving Pelco a chance at life. IPVM spoke with...
San Francisco Face Recognition Ban And Surveillance Regulation Details Examined on May 14, 2019
San Francisco passed the legislation 8-1 today. While the face recognition 'ban' has already received significant attention over the past few...
ACRE Acquires RS2, Explains Acquisition Strategy on Apr 19, 2019
ACRE continues to buy, now acquiring RS2, just 5 months after buying Open Options. One is a small access control manufacturer from Texas, the...
ISC West 2019 Report on Apr 12, 2019
The IPVM team has finished at the Sands looking at what companies are offering and how they are changing their positioning. See below for 50+...
Failed Integrator Rollup, Securadyne Sells to Guard Giant Allied on Apr 10, 2019
One of the most ambitious integrator rollups of the decade has reached its conclusion—selling to a mega guard company. Allied Universal has...

Most Recent Industry Reports

Hikvision Global News Reports Directory on Oct 17, 2019
Hikvision has received the most global news reporting of any video surveillance company, ever, ranging from the WSJ, the Financial Times, Reuters,...
Camera Calculator V3.1 Release Improves User Experience on Oct 17, 2019
IPVM has released a new version of our Camera Calculator, V3.1, with significant user experience improvements, a new development plan, and an...
Securing Access Control Installations Tutorial on Oct 17, 2019
The physical security of access control components is critical to ensuring that a facility is truly secure. Otherwise, the entire system can be...
Access Control Course Fall 2019 - Last Chance on Oct 17, 2019
Register Now - Fall 2019 Access Control Course. Thursday, October 17th is the last day to register. IPVM offers the most comprehensive access...
US DoD Comments on Huawei, Hikvision, Dahua Cyber Security Concerns on Oct 16, 2019
A senior DoD official said the US is "concerned" with the cybersecurity of Hikvision, Dahua, and Huawei due to "CCP" (China Communist Party)...
Pelco Sarix Pro3 Camera Tested on Oct 16, 2019
Pelco has released their Sarix Professional Series 3 cameras, claiming "more security detail in challenging scenes with excellent low light and...
IPVM Camera Calculator User Manual / Guide on Oct 16, 2019
Learn how to use the IPVM Camera Calculator. The guide below includes instructions, images, gifs, and videos demonstrating and explaining the...
Altronix Claims Tango 'Eliminates Electricians' on Oct 15, 2019
Power supply provider Altronix claims its new Tango power supply 'eliminates the need for an electrician, dedicated conduit and wire runs'. In...
Pelco CEO Out, New CEO Found on Oct 15, 2019
Just 2 months after Pelco was sold, Pelco's CEO is out, with Pelco bringing in an outside President and searching for a new CEO from the industry,...