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Suspect Chinese Surveillance Gear Offered For Sale To U.S. Government (#GotBitcoin?)

An online store run by the U.S. government offers equipment for sale that has sparked security concerns despite rules banning purchases. Suspect Chinese Surveillance Gear Offered For Sale To U.S. Government (#GotBitcoin?)

Thousands of pieces of Chinese video surveillance equipment that have provoked national security concerns have been listed for sale on an online superstore catering to U.S. government agencies, despite a ban that went into effect this week.

The listings are for cameras and recording equipment made by Hangzhou Hikvision Digital Technology Co., 42%-owned by the Chinese government, and Dahua Technology Co., a privately owned Chinese surveillance-equipment maker, The Wall Street Journal found.

Hikvision and Dahua don’t directly sell their wares via the online store, but their equipment is available via independent U.S. resellers that act as middlemen. Listings of Chinese equipment by these resellers claim that the gear has been made in the U.S. and Switzerland. Hikvision and Dahua say they don’t manufacture equipment in those countries.

The use of equipment made by Hikvision on U.S. military installations, police departments and embassies has sparked concern about security vulnerabilities in the equipment that the Chinese government might exploit. China has relied heavily on Hikvision, in particular, to watch over its 1.4 billion citizens, including ethnic minority Uighur Muslims.

Congress last year passed legislation that prohibits federal government agencies from buying equipment from Chinese companies including Hikvision, Dahua and communications equipment provider Huawei Technologies Co. The ban took effect Aug. 13. Even before the explicit ban on purchases from those companies, such government buying wouldn’t have been allowed because China isn’t on a list of countries from which agencies are allowed to buy items.

However, their equipment finds its way onto the online superstore through resellers authorized to list goods there. After agencies place orders, distributors that work with the resellers fulfill them.

Hikvision is the world’s largest surveillance camera maker. The U.S. is the company’s second largest market, after China, representing about 8% of sales, according to FactSet, likely to private buyers and others not covered by federal bans.

Three days after the ban took effect, around 1,350 Dahua products remained for sale on the portal, investigators found. However, a similar number from Hikvision appeared to have been taken down Thursday, including surveillance cameras of all types and network recorders to store surveillance video, the Journal found. A few dozen Dahua products disappeared from the site between Tuesday and Wednesday.

The General Services Administration, the federal agency that oversees $66 billion of government purchases ranging from basic office supplies to cloud-computing services, runs the online marketplace, called GSA Advantage, where the items remain for sale.

“Chinese-made items, including surveillance systems manufactured by Hikvision and Dahua, should not be on GSA Advantage, as there is no trade act agreement with China,” a GSA spokeswoman said.

The Hikvision products were described as made in the U.S., while the Dahua equipment was listed as manufactured in Switzerland or the U.S. Such country-of-origin descriptions, which those companies say are false, could have allowed the equipment to avoid the GSA’s filters.

The GSA marketplace lists millions of products for sale to the federal government. The GSA spokeswoman said the agency has an automated process that removes items that should not be for sale. The GSA was working to identify Hikvision and Dahua equipment listings after the new ban took effect, she said, and resellers had been notified of items targeted for review and removal.

A Hikvision executive this year repeatedly asked the GSA to remove the company’s products from the GSA Advantage platform, according to emails reviewed by The Wall Street Journal. He told GSA the equipment had been listed with false country-of-origin data four or five times in recent years. GSA officials responded by saying they removed some of the items and that an automated solution was on the way, according to the emails.

Hikvision sends cease-and-desist orders to resellers who list their products on the GSA site, a person close to the company said.

A Dahua spokesman said the company was investigating the issue.

The GSA spokeswoman said the agency tries to prevent Chinese equipment from appearing on the site, but said the onus of making sure that products listed for sale complied with government rules lay with resellers.

The resellers offering the equipment for sale are often small businesses that act as middlemen between the government agencies buying the equipment and distributors that fulfill the orders.

Tera Consulting Inc., one of the vendors listing suspect surveillance gear on the GSA site, relied on its distributors to provide accurate information about products and put that data on the GSA Advantage site, according to a company official. The company worked with distributors to ensure compliance, but some products could have been mislabeled, the person said. The company had asked the GSA to remove such items after inquiries from The Wall Street Journal, the person said.

Jim Wrigglesworth, the vice president of Wrigglesworth Enterprises in Wilmington, N.C., another company that offered such Chinese equipment for sale, said it lists more than 1 million products on the GSA site, so some errors were possible. “We do our own spot checks, but every so often one gets up there,” he said. The Chinese cameras the company had offered for sale were in a “delete file” and slated for removal, he said. They had disappeared from the site by Friday.

The GSA spokeswoman said no transactions involving Hikvision or Dahua products were made within the past year. Suspect Chinese Surveillance Gear,Suspect Chinese Surveillance Gear,Suspect Chinese Surveillance Gear


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