Congress passes bill banning new FCC equipment authorizations for Hikvision, Dahua and others

Update: The U.S. Senate on Thursday, Oct. 28, 2021, unanimously passed the Secure Equipment Act of 2021, which will now be sent to President Joe Biden for final approval. Our earlier story on the House's passage of the legislation can be found below.     

October 22, 2021 – The U.S. House of Representatives on Wednesday passed a bill that would effectively ban the importation and sale of all new products from Chinese surveillance giants Dahua and Hikvision.

The Secure Equipment Act of 2021, which was introduced by Reps. Steve Scalise (R-La.) and Anna Eshoo (D-Calif.,) requires the Federal Communications Commission (FCC) to formally adopt a proposed rulemaking measure it introduced earlier this year that would prohibit the agency from reviewing or issuing new equipment authorizations for companies that have been placed on its so-called “Covered List” of organizations whose equipment and services have been deemed as posing a threat to national security. Aside from Hikvision and Dahua, the list includes several other high-profile China-based manufacturers, including Huawei, ZTE Corporation and Hytera Technologies.

“By prohibiting the FCC from issuing any equipment licenses to companies identified as a threat to our national security, this bill prevents compromised Chinese equipment from threatening America’s networks,” Scalise said in a statement. “The Secure Equipment Act sends a strong signal to the Chinese Communist Party that America is committed to securing our networks and protecting the privacy and safety of our citizens. I’m proud to have worked with Rep. Eshoo in writing this important bipartisan legislation, and I look forward to its passage in the Senate as this bill moves one step closer to becoming law.”

“I’ve fought for over a decade to address vulnerabilities in our telecommunications infrastructure that directly impact our national security,” Eshoo added. “Equipment made by Huawei and ZTE, companies linked to the Chinese government, increase the vulnerabilities of our telecommunication systems, and put the U.S. at risk. I'm so pleased that the House passed bipartisan, bicameral legislation that Rep. Scalise and I co-authored to prohibit the FCC from issuing licenses for any telecommunications equipment made by Huawei or ZTE.”

In a statement, Dahua said that it will continue to closely monitor the movement of the legislation. 

"We are committed to complying with applicable law in every market in which we operate and to continuing to be an active, constructive participant in the U.S. security technology marketplace,” the statement read. 

A spokesperson for Hikvision declined to comment on the matter when contacted by SecurityInfoWatch.com. 

Industry Impact

One key difference between the House bill and the proposed FCC rule is that the Secure Equipment Act would prohibit the rulemaking from requiring the review or revocation of equipment authorizations granted before it is finalized. In its initial proposal, the FCC had also sought comment on whether it should revoke previous equipment authorizations from the aforementioned vendors, which caused concern among some industry observers.

In a letter from Consumer Technology Association (CTA) counsel Megan Brown outlining the highlights of a meeting between CTA and regulators in early June, the CTA expressed concerns to the FCC about the potential of the commission making retroactive changes.

“CTA explained that broad changes to the equipment authorization regime for devices currently exempt could be disruptive and impose substantial burdens on manufacturers well beyond the few covered entities,” the letter reads. “CTA explained that revocation or retroactive changes to the status of equipment or components could be difficult to implement for manufacturers across the supply chain, suggesting a need for close commission review of a full record. CTA also noted that there are questions about whether the commission has sufficient existing statutory authority to implement the various proposals in the NPRMand NOI.”

In a column outlining the potential implications of the legislation on the security industry, Jake Parker, Senior Director of Government for the Security Industry Association (SIA), noted that It would be “unprecedented” for the FCC to revoke previous equipment authorizations for reasons unrelated to either misrepresentation of the technical details of a product or faults in applications.

Congress has already banned the purchase and installation of products from these companies by federal agencies via an amendment to the 2019 National Defense Authorization Act (NDAA), which went into full effect last year. For a full timeline of the actions taken by the federal government, as well as the Biden and Trump administrations against both Hikvision and Dahua, be sure to read this article published on SecurityInfoWatch earlier this year.    

Should the Secure Equipment Act become law, Parker says integrators need to be prepared.

“If finalized, the FCC action will reduce supply and eventually eliminate future availability in the U.S. of products from these companies, which will require adjustments by all companies that may still be utilizing them, and impact product offerings, costs and other business operations – even if they are not federal suppliers,” Parker wrote.