Human Rights vs. Export Rights- New Sanctions against Chinese Entities

The U.S. Department of Commerce announced sanctions against twenty-eight Chinese governmental and commercial organizations for engaging in or enabling activities contrary to the foreign policy interests of the United States, by adding these organizations to the Entity List. Eight of the entities are companies and the remaining twenty are municipal and county public security bureaus and the Xinjiang Police College.

The eight commercial entities added to the Entity List include Hangzhou Hikvision Digital Technology Co. which is one of the world’s largest manufacturers of AI-driven video surveillance products, Megvii Technology Ltd. and SenseTime Group Ltd., both leading digital forensics firms and leaders in the fields of Facial Recognition and Artificial Intelligence, and Iflytek Co., a leading company in voice recognition.

The entities that were listed have been connected to human rights abuses with respect to China’s suppression of rights of the Uighurs and other predominantly Muslim ethnic minorities in the Xinjiang Uighur Autonomous Region (XUAR).

Hangzhou Hikvision Digital Technology Co. is not new to US sanctions. An  interim rule from the General Services Administration, the Department of Defense and NASA was published on August 7, 2019 (effective August 13, 2019) prohibiting any federal agency from purchasing telecommunications and video surveillance equipment, along with any “substantial or essential component of any system, or as critical technology as part of any system” from Hangzhou Hikvision Digital Technology Co. For more information on this, see my previous blog “Additional actions against Chinese companies”.  Hangzhou Hikvision Digital Technology Co. was also prominently mentioned in my blog titled “Ever Heard of China’s National Intelligence Law? Perhaps Indirectly” along with Megvii Technology Ltd. and Iflytek Co. as potential targets for sanctions.

Although most sanctions have a rationale of economic or national security as an underlining premise; as a matter of foreign policy, human rights violations, although rarely cited, can also trigger sanctions.

These additional sanctions come on the eve of the next round of trade talks between the U.S. and China, scheduled for October 10th in Washington, DC.

For assistance in determining if any of your customers might be on a restricted party list, please contact Export Solutions for a free consultation.