The Case for Applying Global Magnitsky Sanctions Against Hikvision

The Case for Applying Global Magnitsky Sanctions Against Hikvision

The United States and its allies should levy Magnitsky sanctions on Hikvision and convey that they are prepared to add more Chinese companies if the Xinjiang surveillance state continues to operate unabated.

 

Shoot-to-kill policies for Uyghurs and other Turkic Muslims who attempt to escape internment camps in Xinjiang are just some of the Chinese government’s vicious practices that have lately come to light. These continued atrocities could reportedly soon prompt the Biden administration to impose hard-hitting, unprecedented Global Magnitsky Act sanctions against Chinese artificial intelligence (AI) surveillance giant Hikvision for its role in enabling these abuses in Xinjiang. In a move that would send a strong signal about how seriously committed the United States and its allies are to ending tech-enabled repression and genocide, these sanctions would be a well-founded warning to any company that intends to remain intertwined in the Xinjiang surveillance complex.    

Hikvision’s addition to the U.S. Treasury Department’s Specially Designated Nationals (SDN) List via the Global Magnitsky Act would be a first for a Chinese technology company. The SDN list is regarded as one of the sharpest tools in the arsenal because it freezes individuals or entities’ U.S.-held assets, prohibits U.S. persons from engaging in trade and investment with the target, and outlaws transactions involving the U.S. financial system. 

 

Adding Hikvision to the SDN has been under serious consideration since the Trump administration. By briefing allies on it recently, the United States has demonstrated that it is clear-eyed about the turbulence it would cause to the already fraught U.S.-China relationship, not to mention the logistical headaches involved with replacing Hikvision equipment worldwide. Previous policy actions have not moved the needle on the crisis in Xinjiang, but including Hikvision on the SDN list would be a step forward, solidifying the position of the United States and its allies on China’s repression. The United States and its allies should move to quickly implement the Global Magnitsky Act across their sanctions regimes and supercharge the existing suite of policy actions against Hikvision.

If the Biden administration implements these sanctions, it should consider what strategic aims it hopes to achieve by wielding this powerful tool. Since other Chinese AI champions could act as substitutes for Hikvision in enabling repression in Xinjiang, the administration should warn against this by publicly signaling that it will be closely monitoring the impacts and evaluating the possibility of adding other major players to the SDN list in the future. For example, major Chinese companies that also provide Uyghur detection technology include Alibaba, Dahua, Huawei, Megvii, SenseTime, and Tiandy.

Hikvision’s Activities in Xinjiang 

The Biden administration is considering sanctioning Hikvision for good reason. The company has been one of the most active in Xinjiang and is one of the world’s largest video surveillance companies by market share. Over 4.8 million internet protocol (IP) addresses in 180 countries use Hikvision equipment. In 2017 alone, Hikvision won bids for five Safe Cities projects in Xinjiang worth a total of $293 million, with maturity dates extending up to 2040. Xinjiang authorities have mandated end-to-end use of Hikvision technology platforms and display screens for their “Stability Maintenance and Comprehensive Management Centers,” which surveil the local population. Since November 2021, evidence has emerged showing Hikvision cameras surveilling both the interiors and exteriors of the internment camps. The company also plays a direct role in building and expanding the big data-based policing app known as the Xinjiang Integrated Joint Operations Platform—overseen by Hikvision’s state-owned parent company China Electronics Technology Group Corporation (CETC)—which recommends candidates for formal arrests and extralegal detention in the internment camps.

Ramping Up the Pressure

The proposed sanctions would supercharge an existing suite of policy actions against Hikvision. These actions began in October 2019, when the U.S. Commerce Department first used human rights to justify adding government bodies and Chinese companies, including Hikvision, to its Entity List. This effectively banned technology exports and re-exports to targeted entities. The move was likely made due to Hikvision and other hardware-reliant surveillance companies’ heavy dependence on U.S. technologies. However, due to the opacity of supply chain data, questions on how effectively Hikvision has weathered this storm remain unanswered. For instance, it is unclear if companies on the Entity List are continuing to source U.S. technology through alternate means, if they have found non-U.S. suppliers, or developed their own alternatives. For their part, Hikvision and Dahua responded that while certain chips will be difficult to replace, most U.S. components could be substituted with minimal impact on product performance. Because these measures have had uncertain effects, it makes further policy actions all the more necessary.

Last year, President Biden added surveillance companies Hikvision and Huawei to a November 2020 Trump administration ban on U.S. investments in China’s military-industrial complex. The deadline to divest recently passed on June 3, and this will be an area to closely watch in terms of its effect on Hikvision’s operations. Global Magnitsky sanctions would complement this action, as it would expand the reach beyond U.S. investment bans by freezing Hikvision out of the global financial system.

While no Chinese technology company has been targeted by the Global Magnitsky Act yet, the Treasury Department has used it three separate times since July 2020, including to coordinate with the sanctions regimes of the European Union, Canada, and the United Kingdom in March 2021. Targets included leaders of the Xinjiang Uyghur Autonomous Region, as well as responsible individuals and the entire entity of the Xinjiang Public Security Bureau and the Xinjiang Production and Construction Corps, a paramilitary organization that runs many of the Xinjiang internment camps. However, these moves were largely symbolic, as the individuals targeted may have rarely traveled or conducted business with the United States and the entities continue to operate the camps unimpeded. 

But as a major global player, cutting Hikvision off from the global financial system would be a very different story. If enforced to the hilt, especially in concert with allies’ parallel sanction regimes, this policy could jeopardize the 27 percent of total revenue that Hikvision derives from overseas and turn Hikvision into a pariah outside of China. Experts have argued that Global Magnitsky tools work better when they are part of a suite of other policy actions, especially when done in concert with multilateral actors, as was done in March 2021. Coordinating multilateral sanctions against Hikvision would be a powerful step in bringing Hikvision’s operations to heel. Doing so would convey a unified message that the United States and its allies will not tolerate the ongoing abuses in Xinjiang. 

 

Sanctioning Hikvision would also be a strong complement to the Secure Equipment Act of 2021. This requires the Federal Communications Commission (FCC) to ban equipment reviews or approvals for use in the United States from several Chinese surveillance companies, including Hikvision. The FCC will soon implement the ban, which would go a long way in addressing concerns about the logistical complexities of replacing Hikvision equipment. 

Some experts argue that the SDN designation is too heavy-handed, would damage the U.S.-China relationship, and should be saved for a more active conflict situation. The U.S. government decided not to place Huawei on the SDN List in 2019 for similar reasons. 

However, in the absence of meaningful progress on the Xinjiang crisis, the United States and its allies cannot stand by while the Uyghur and Turkic Muslim peoples continue to suffer. Instead, they should demonstrate their willingness to bring out sharper tools in a coordinated fashion. Secretary of State Antony Blinken recently underscored this point while unveiling the administration’s China strategy, saying Beijing is wrong to insist “these are somehow internal matters that others have no right to raise.” Few tools are more effective at conveying this than the Global Magnitsky sanctions. The United States and its allies should levy these on Hikvision and convey that they are prepared to add more Chinese companies if the Xinjiang surveillance state continues to operate unabated. 

Dahlia Peterson is a research analyst at Georgetown University’s Center for Security and Emerging Technology (CSET). Follow her on Twitter @dahlialpeterson.

Image: Reuters.