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."

5 reports cite this report:

Trade Groups Request NDAA Blacklist Delay Citing Coronavirus on Apr 06, 2020
Two trade groups representing government contractors have asked Congress to delay implementation of the NDAA's 'blacklist' clause from this August...
Hikvision Global News Reports Directory on Jan 17, 2020
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 (24) : Members only. Login. or Join.

Related Reports

Hikvision CEO And Vice-Chair Receive Warning, Government Investigation Concluded on Mar 16, 2020
The China Securities Regulatory Commission (CSRC) has concluded their investigation into Hikvision's CEO and Vice-Chair, issuing a warning but no...
White House Proposes Blacklist of Dahua, Hikvision Users on Feb 04, 2020
The White House is proposing to blacklist Hikvision and Dahua users from federally-funded contracts, even if their use of this equipment is...
Hikvision CEO And Vice-Chair Under PRC Government Investigation on Nov 14, 2019
In a surprising and globally covered move, Hikvision CEO Hu Yangzhong and Vice-Chairman Gong Hongjia are being investigated by China's securities...
US Issues Criminal Charges Against Aventura For Fraudulently Selling Hikvision And Other China Products on Nov 07, 2019
The US government has made an unprecedented move on the video surveillance supply chain, charging a US company, Aventura for "having conspired with...
US State Department: "Chinese Tech Giants" "Tools of the Chinese Communist Party" on Sep 12, 2019
The US State Department has called out "Chinese tech giants" for being "tools of the Chinese Communist Party" in a blunt new speech that makes...
Hikvision Lobbying Against And Preparing For Potential US Sanctions on Sep 09, 2019
Hikvision has been lobbying against and preparing for potential US sanctions, according to US government records, financial filings and partner...
Embattled $400 Million China Funded Philippines Surveillance System Proceeds on Jun 13, 2019
An embattled 12,000 camera surveillance system project that will cost ~$400 million will proceed. The project contract was awarded, had its...
Ban Proceeds But White House Requests Delay of Hikvision / Dahua Partner Blacklist on Jun 10, 2019
While the August 2019 start of the US government ban on buying Dahua, Hikvision, Huawei, etc. proceeds, the White House's budget director is...
Congressman Visits Hikvision USA, Admits Unaware of "Company's Background" Before Backtracking on May 31, 2019
A newly-elected US congressman visited Hikvision USA's office in April, posing for a photo with Hikvision's staff: A sitting US congress...
Trump Signs 'Huawei Ban' - Executive Order Targeting Foreign Adversary Technology on May 16, 2019
US President Donald Trump has signed an executive order targeting technology provided by 'foreign adversaries', in what is widely being called a...

Most Recent Industry Reports

LIVE Now "Fever Camera" Show Day 2 on Jun 03, 2020
IPVM is excited for the world's first "Fever Camera" show. Day 2 is today from 11am to 4pm EDT. Recordings from Day 1 are posted at the end of this...
Cobalt Robotics Presents Indoor Security and Access Robots on Jun 03, 2020
Cobalt Robotics presented indoor security robots at the May 2020 IPVM Startups show. Inside this report: A 30-minute video from Cobalt...
Dahua Sues Ex-North American President, Says Legal Typo on Jun 03, 2020
Dahua's former North American President Frank Zhang claims he is owed almost $11 million but Dahua counter claims it is just a "scrivener's error",...
Smart Entry Systems Presents Cloud Multi-Tenant Access Control on Jun 02, 2020
Smart Entry Systems presented Cloud Multi-Tenant Access Control at the May 2020 IPVM Startups show. Inside this report: A 30-minute video...
Genetec Drops Support for Dahua and Hikvision on Jun 01, 2020
Genetec has dropped support for Dahua and Hikvision, citing US blacklisting and ONVIF conformance blockage, the company informed partners in an...
Dotty "Hot Or Not" Elevated Body Temperature App Tested on Jun 01, 2020
What if you could take an existing phone or tablet and transform it into "fever camera"? That is what DottyAR is doing with their strangely named...
Optris "Fever Screening Systems" Examined on Jun 01, 2020
German manufacturer Optris has been building temperature measuring instruments for industrial manufacturing for over 15 years, and thermal cameras...
Fever Camera Sales From Integrators Surveyed on Jun 01, 2020
Fever cameras are the hottest trend in video surveillance currently but how much are integrators selling them? 220 integrators answered the...
Proxy Presents Mobile Credentials For BLE Devices and Access on May 29, 2020
Proxy presented Mobile Credentials For BLE Devices and Access at the May 2020 IPVM Startups show. Inside this report: A 30-minute video...
ISC West 2020 Moves To The Basement on May 29, 2020
The twice cancelled/postponed show will now not only be held in a different month (October) but on a different floor, moving down to the...