In the blocks surrounding the White House, the U.S. Capitol Building, and the Pentagon, Hikvision cameras keep a watchful eye. In fact, at least 2,900 products from the Chinese security camera company surveil the streets of America’s capital alone, according to Shodan, a platform that collects data on devices connected to the internet.

But now, the officials inside those buildings may be considering a move that would make Hikvision one of the country’s top Chinese corporate targets, effectively eliminating its presence in the U.S. and potentially spelling the end of its rapid global expansion.

Reports emerged last week that the Treasury Department is considering hitting Hikvision with the toughest sanctions in the U.S. toolkit, by placing it on the Specially Designated Nationals and Blocked Persons (SDN) list. That designation would block any American trade and investment in the company, and prohibit it from any interaction with the U.S. financial system, making it much harder for the company to operate in any country outside China. The Treasury did not respond to requests for comment. 

Hikvision would be the first major Chinese tech company put on the SDN list – even Huawei, the Chinese telecommunications giant, has not been subject to this designation. While the list is usually reserved for companies engaged in drug trafficking, proliferation of weapons of mass destruction or terrorism, Hikvision is under pressure due to its alleged involvement in the Chinese state’s human rights abuses in Xinjiang. 

Such a move, if implemented, would roil the global security industry, potentially forcing providers to shift suppliers and customers to ditch Hikvision for other, more expensive products. It would also signal the U.S. government’s willingness to expand the arsenal of economic weapons it uses to push back against China’s human rights abuses — all at a time when decoupling between the American and Chinese economies is gathering pace, particularly in the technology sector. 

“SDN listing is a big deal because it is essentially kicking this company off the global financial infrastructure,” says Emily Kilcrease, a fellow at the Center for a New American Security and former USTR official. “That is a pretty escalatory step, and would be a significant shift in sanctions policy.”

Founded in 2001, Shenzhen-listed Hikvision is 42 percent state-owned, according to WireScreen data. The company’s low-cost products are now used in more than 150 countries, by customers including governments, large and small corporations, and ordinary households — making it arguably one of China’s most successful firms overseas. 

But in the last several years, the company has become the corporate face of the Chinese government’s surveillance state in Xinjiang, where its cameras are used by the police to track the region’s Muslim population. In 2019, the Trump administration placed the company on the Entity List, which blocks U.S. companies from supplying the firm with physical components or computer software. That same year, legislation banned the use of federal dollars on Hikvision products.

In addition to human rights issues, the government has raised concerns about data security and hacking vulnerabilities in Hikvision products. Reporting has also suggested that Hikvision products are used for military purposes in China, an accusation the company has denied. 

The rise of this company has been the story of the last decade. This would put an end to that,

Charles Rollet, an analyst at IPVM, a surveillance industry research firm. 

Despite the existing sanctions, Hikvision products remain prevalent in North America, where it operates a California-based subsidiary that employs around 400 people, and across Europe and Asia. Top10VPN, a technology research firm, identified 4.8 million Hikvision surveillance camera networks outside of China, with 607,000 networks in the U.S. alone. In the U.K., another major Hikvision customer, Top10VPN found that 65 percent of surveyed city councils use its products. 

“Given the sheer number of Hikvision cameras in operation globally,” says Samuel Woodhams, a Top10VPN researcher, “it would be extremely difficult to replace them all.” The U.S. Department of Defense has experienced this problem first hand; after legislation banned the military from doing business with contractors who use Hikvision products, it secured a waiver to continue using contractors who use Hikvision until September 2022 (but only for buying “low risk” products from those contractors). 

It is still unclear how strictly the SDN listing would be interpreted, given its unprecedented nature, but experts expect it to cause major disruption.  “The rise of this company has been the story of the last decade. This would put an end to that,” says Charles Rollet, an analyst at IPVM, a surveillance industry research firm. “It would be just a seachange for the surveillance camera market.”

Rollet adds that while there are U.S. alternatives to Hikvision cameras, the products are generally higher cost, and the main beneficiaries of Hikvision’s demise would be other Chinese companies, like Uniview Technologies and Dahua Technology, which has also been accused of human rights abuses in Xinjiang (The U.S. has also banned the federal government or its suppliers from using Dahua equipment). 

Being placed on the SDN list would be a significant financial blow for Hikvision: In 2021, its global business contributed 27 percent of its total revenue – up nearly a quarter from the year before. In a statement to The Wire, a Hikvision spokesperson said that the potential SDN listing is still unverified. “We believe any such sanction should be based on credible evidence and due process. We look forward to being treated fairly and without bias,” the spokesperson said. “Like all other leading technology companies in the world, we are committed to ‘technology for good.’”

While human rights activists have welcomed the U.S.’s latest potential pushback against China’s activities in Xinjiang, others have questioned where sanctioning Hikvision would fit in President Biden’s overall approach to the country’s primary strategic rival: The administration has yet to announce a comprehensive China policy framework. There is also confusion about why Hikvision is being singled out — given that several other Chinese companies that operate in Xinjiang have business in the U.S. — and whether it is prudent to set this new sanctions precedent.

“Taking this step raises uncomfortable questions about the stopping point,” says Jon Bateman, a fellow at the Carnegie Endowment for International Peace who recently wrote a piece about the sanctions. “And the U.S. government has not been good at answering those questions.”

My fear is that a major escalation like this increases the risk of a runaway decoupling that the U.S. may not be able to control.

Jon Bateman, a fellow at the Carnegie Endowment for International Peace

Bateman adds that this would have potentially unforeseeable impacts on the broader trend of U.S.-China technological decoupling. China has recently moved to replace U.S. computers with domestic alternatives in government offices, according to Bloomberg reporting, and continues to incentivize homegrown tech champions in critical areas. 

“The U.S. government does not have full control of pace and scope of decoupling,” says Bateman. “The more the U.S. takes these tools in an ambiguous way, the more other actors will react and take retaliatory moves. My fear is that a major escalation like this increases the risk of a runaway decoupling that the U.S. may not be able to control.” 

Others see a more strategic shift in sanctions policy towards a greater concern for human rights over, or at least alongside, issues such as data security that have driven previous steps against the likes of Huawei and TikTok owner Bytedance. 

“You saw a similar thing on export controls – they had never been used for human rights. And now you have dozens of Chinese companies on that list for human rights concerns,” says Ivan Kanapathy, former director for China at the National Security Council, adding that the move against Hikvision has been under consideration since the Trump administration. “If we do set that precedent, Hikvision would naturally be the first, due to its well-documented role in Xinjiang atrocities.”

Regardless of the broader policy objective, there are always trade-offs to sanctioning such a widely used brand. Leo Najera, operations manager at Troy Alarm, a California-based security company, says that all of the camera systems he currently sells to clients are made by Hikvision. “They are very good products, their applications are easy, and the pricing is very good,” he says. “We want our customers to be happy, and that is the reason we use Hikvision.” If the sanctions are put into place, he says he would have to re-orient his entire business. “It would take a bit of a toll.”

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