US Considers Sanctions Against Hikvision and Dahua

By Charles Rollet, Published on May 22, 2019

The US government is considering blacklisting "up to 5" PRC surveillance firms, including Hikvision and Dahua, Bloomberg reported, with human rights abuses in Xinjiang cited as the main reason.

dahua hikvision xinjiang~1

The news comes just days after the US blacklisted PRC telecom/smartphone giant Huawei; despite a 90-day reprieve, the move threatens Huawei's continued existence.

US sanctions on Hikvision, Dahua, and other Chinese surveillance firms would have a major impact on the video surveillance industry. In this post, we examine the news and potential impact, including:

  • Who Is Affected
  • Stocks Fall
  • Type of Sanctions, Possible Impact
  • Timeframe
  • Reasoning / Xinjiang Human Rights
  • Supply Chain Impact
  • Hikvision claims only a 'product supplier'
  • IPVM shows official records showing Hikvision is wrong
  • PRC Government Response

Who Is Affected

Although Bloomberg said "up to 5" China surveillance firms were under consideration, it did not name any others aside from Hikvision and Dahua. Neither did the New York Times, which first broke the story but only mentioned Hikvision as a target.

Stocks Fall

Due to the news, Hikvision's stock plunged almost 10% (the maximum daily allowed in the PRC) and Dahua's fell about 8%, with both recovering slightly:

Type of Sanctions/Impact

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

Both Bloomberg and the NYT reported that the companies are under threat of being added to the Department of Commerce's Entity List, which is what happened to Huawei.

As IPVM has noted, this would effectively ban US companies from supplying most technology to Hikvision/Dahua/etc by requiring these US firms to obtain government licenses which operate under an explicit "presumption of denial" basis.

Such sanctions do not affect imports, only exports; US distributors and integrators can technically still buy products from affected PRC surveillance firms. However, the US Department of Commerce explicitly states that any transaction with Entity List companies is considered a "red flag."

Timeframe: "Coming Weeks"

The NYT article stated that "administration officials could make a final decision in the coming weeks." Bloomberg's piece did not provide a timeframe.

Reasoning for Ban: Xinjiang and 'Espionage'

Bloomberg reported that the reasoning was twofold - human rights along with espionage concerns:

The Trump administration is concerned about their role in helping Beijing repress minority Uighurs in China’s west, they said, asking not to be identified talking about private deliberations. There’s concern also that Hikvision’s or Dahua’s cameras, which come with facial recognition capabilities, could be employed in espionage, the people said.

Complicity in Xinjiang Human Rights Abuses Crucial

Reports indicate that up to 1.5 million Muslims, chiefly members of the Uyghur minority, have been locked up in 're-education camps' in Xinjiang in an unprecedented human rights crisis. As IPVM has reported, Hikvision and Dahua have won over $1.2 billion in PRC government surveillance contracts in Xinjiang, including for:

Immediate Effect on Supply Chains

Hikvision and Dahua have extensive supplier relationships with large American tech firms, as IPVM has reported. An Entity List addition would bar all of the transactions listed below:

This would certainly harm the companies' supply chains, especially their AI efforts. When PRC telecoms firm ZTE was added to the Entity List last year, it almost completely shut down before the US backtracked on the move. We do not see a similar impact happening to video surveillance companies, as IP cameras can generally be made without US core components.

Hikvision Incorrectly Claims Only 'Product Supplier' in Xinjiang

For the first time, Hikvision has directly addressed the Xinjiang situation in a statement it provided to Chinese state media where it claimed to merely be a "product supplier" in Xinjiang:

"Hikvision is a product supplier. We have never done any inappropriate actions in Xinjiang," the company said in a statement to the Global Times. "We have never and would never conduct business operations that are based on the condition of violating human rights."

Such a statement is simply untrue; Hikvision is much more deeply involved, directly winning huge Xinjiang surveillance projects. Even Hikvision's own website directly contradicts this claim. In 2017, Hikvision proudly posted that it had won a $79 million safe city project in Xinjiang's capital of Urumqi, stating the project included about 30,000 cameras and data centers.

Bidding documents also show Hikvision itself directly bid and won wide-ranging surveillance projects in Xinjiang. For a $46m project in Xinjiang's Karakax (or Moyu) county, Hikvision is listed as the sole winner in Chinese bidding documents, which even include its headquarters' address in Hangzhou and state the project is "BOT", a scheme in which companies Build, Operate, and then Transfer projects to authorities. Hikvision is also listed as the only winner in bidding documents for a different $53 million surveillance project in Pishan County, which also list its Hangzhou address.

Promises Review

Hikvision even promised an outside review of its Xinjiang operations:

Hikvision also said that it has hired professionals from the US to conduct an independent review of the company's operations in Xinjiang and will respond to foreign and domestic concerns when they have gathered full evidence.

Given Hikvision's falsehoods about being a simple "provider" in Xinjiang, such a review seems unlikely to produce any reliable results.

Dahua No Official Response

IPVM could not find an official response from Dahua. Chinese media reported that a Dahua official responded by saying that the company had not received any news from US officials about these developments, while downplaying Dahua's reliance on US technology. We will update if Dahua issues a formal statement.

PRC Government Response

Reuters reports that Lu Kang, the spokesperson for China's foreign ministry, addressed the potential PRC surveillance sanctions at a daily news briefing:

[Kang said] that China opposes the United States smearing Chinese companies, after media reports that the U.S. administration is considering Huawei-like sanctions on Chinese video surveillance firm Hikvision.

China urges the United States to provide a fair and non-discriminatory environment for Chinese firms, ministry spokesman Lu Kang told a daily news briefing.

Conclusion: Sanctions More Likely Than Ever

The Trump administration previously considered implementing Xinjiang sanctions on Hikvision and Dahua last fall. However, those demands reportedly fell by the wayside as trade talks with China improved.

Now, with US-China tensions heating up significantly, sanctions are back on the table and look more likely than ever before. Everyone in the video surveillance industry will need to pay close attention.

Vote / Poll

17 reports cite this report:

Video Surveillance History on May 06, 2020
The video surveillance market has changed significantly since 2000, going...
UK Stands Behind Hikvision But Controversy Continues on Feb 18, 2020
Hikvision is exhibiting at a UK government conference for law enforcement,...
Hikvision Markets Uyghur Ethnicity Analytics, Now Covers Up on Nov 11, 2019
Hikvision has marketed an AI camera that automatically identifies Uyghurs, on...
ONVIF Suspends Huawei on Sep 20, 2019
Huawei has been 'suspended', and effectively expelled, from ONVIF so long as...
Hikvision Lobbying Against And Preparing For Potential US Sanctions on Sep 09, 2019
Hikvision has been lobbying against and preparing for potential US sanctions,...
Megvii Financials and Growth Examined on Aug 30, 2019
Megvii has already received more than a billion dollars in investment. Now,...
Uniview Beats Intel In Trademark Lawsuit on Aug 19, 2019
Uniview has won a long-running trademark lawsuit brought by Intel, with...
Hikvision Cameras Covering Concentration Camps on Jul 29, 2019
Hikvision cameras monitoring a concentration camp were shown in a recent BBC...
Australia Security Full Show Report on Jul 25, 2019
IPVM went to Australia attending the 3 days of the Australia Security...
Hikvision's Government Owner Website Blocked To World on Jul 11, 2019
Hikvision's PRC government owner, CETHIK, has had its website blocked outside...
RaySharp Revealed - Major China OEM For Western Consumer Video Surveillance on Jul 02, 2019
RaySharp is mostly unknown, even among people in the video surveillance...
2019 Mid-Year Video Surveillance Guide on Jul 01, 2019
IPVM's new 400+ page Mid-Year Industry Guide brings all of these issues and...
Hikvision USA Giving Free Cameras In Biggest Flash Sale on Jun 26, 2019
Hikvision redefined sales promotions in the US video surveillance market,...
China / US Trade War Impact Splits Industry on Jun 04, 2019
As the trade war continues to heat up, 170+ integrators told us "What impact...
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,...
Alibaba Makes Major Investment Into Uniview on May 30, 2019
China's e-commerce and cloud services giant Alibaba has bought 15% of the...
Hikvision: In China, We Obey PRC Human Rights Law on May 28, 2019
Hikvision defended its activities in Xinjiang, where the PRC is accused of...
Comments (35) : Members only. Login. or Join.

Related Reports

Axis Exports To China Police Criticized By Amnesty International on Sep 21, 2020
Axis Communications and other EU surveillance providers are under fire from...
China's SMIC Hit By US Trade Restrictions, Impact On Video Surveillance on Oct 13, 2020
US trade restrictions have hit Semiconductor Manufacturing International...
Huawei HiSilicon Shortage Impacts Surveillance Manufacturers on Aug 14, 2020
Huawei acknowledged problems and challenges for its HiSilicon chip business,...
Hikvision Put on US DoD "Communist Chinese Military Companies" List, Faces Risk of Presidential Sanctions on Jun 26, 2020
The US DoD has put Hikvision on a list of "Communist Chinese Military...
US Passes Uyghur Human Rights Law Condemning Mass Surveillance on Jun 18, 2020
The US government has passed the Uyghur Human Rights Policy Act of 2020,...
Honeywell Warns of Huawei, Advocates Futureproofing on Aug 31, 2020
For years, Honeywell has profited from OEMing Dahua and using Huawei...
Ban Rules Released: Use Dahua or Hikvision, No US Government Contracts on Jul 13, 2020
The US government has released the rules implementing the "Prohibition on...
Uniview H1 2020 Financials Examined on Sep 08, 2020
While Dahua and Hikvision, helped by fever camera sales, are recovering from...
Hikvision Q3 2020 Global Revenue Rises, US Revenue Falls on Oct 27, 2020
While Hikvision's global revenue rises driven by domestic recovery, its US...
Sunell is The First China Manufacturer to Market NDAA Compliance on Jul 30, 2020
Most China manufacturers are going to be impacted by the NDAA 'Blacklist...
China General Chamber of Commerce Calls Out US Politics on Sep 24, 2020
While US-China relations are at an all-time low, optimism about relations...
NDAA Compliant Video Surveillance Whitelist on Aug 10, 2020
This report aggregates video surveillance products that manufacturers have...
Infinova, March Networks and Swann H1 2020 Financials Examined on Sep 02, 2020
While Dahua and Hikvision, helped by fever camera sales, are recovering from...
Salesforce Drops Dahua and Hikvision on Aug 12, 2020
Salesforce has dropped Dahua and Hikvision as customers, forcing the two mega...
Indian Government Restricts PRC Manufacturers From Public Projects on Aug 04, 2020
In a move that mirrors the U.S. government’s ban on Dahua and Hikvision...

Recent Reports

Bedside Cough and Sneeze Detector (Sound Intelligence and CLB) on Oct 28, 2020
Coronavirus has increased interest in detecting symptoms such as fever and...
Fever Tablet Thermal Sensors Examined (Melexis) on Oct 28, 2020
Fever tablet suppliers heavily rely on the accuracy and specs of...
Verkada Fires 3 on Oct 28, 2020
Verkada has fired three employees over an incident where female colleagues...
Recruiters Online Show LIVE Thursday! on Oct 27, 2020
IPVM's 7th online show resumes Thursday with 12 recruiters presenting...
Eagle Eye Networks Raises $40 Million on Oct 27, 2020
Eagle Eye has raised $40 million aiming to "reinvent video...
Hikvision Q3 2020 Global Revenue Rises, US Revenue Falls on Oct 27, 2020
While Hikvision's global revenue rises driven by domestic recovery, its US...
VICE Investigates Verkada's Harassing "RawVerkadawgz" on Oct 26, 2020
This month, IPVM investigated Verkada's sexism, discrimination, and cultural...
Six Flags' FDA Violating Outdoor Dahua Fever Cameras on Oct 26, 2020
As Six Flags scrambled to reopen parks amid plummeting revenues caused by the...
ISC Brasil Digital Experience 2020 Report on Oct 23, 2020
ISC Brasil 2020 rebranded itself to ISC Digital Experience and, like its...
Top Video Surveillance Service Call Problems 2020 on Oct 23, 2020
3 primary and 4 secondary issues stood out as causing the most problems when...
GDPR Impact On Temperature / Fever Screening Explained on Oct 22, 2020
What impact does GDPR have on temperature screening? Do you risk a GDPR fine...
Security And Safety Things (S&ST) Tested on Oct 22, 2020
S&ST, a Bosch spinout, is spending tens of millions of dollars aiming to...
Nokia Fever Screening Claims To "Advance Fight Against COVID-19" on Oct 22, 2020
First IBM, then briefly Clorox, and now Nokia becomes the latest Fortune 500...
Deceptive Meridian Temperature Tablets Endanger Public Safety on Oct 21, 2020
IPVM's testing of and investigation into Meridian Kiosk's temperature...
Honeywell 30 Series and Vivotek NVRs Tested on Oct 21, 2020
The NDAA ban has driven many users to look for low-cost NVRs not made by...