Chairman John Moolenaar and Ranking Member Raja Krishnamoorthi of the U.S. House Select Committee on the Chinese Communist Party have urged the Federal Communications Commission (FCC) to conduct an investigation into a recent transaction involving Zhejiang Dahua Technology, a Chinese manufacturer of surveillance equipment, to determine if it represents an effort to circumvent U.S. national security measures. In a correspondence addressed to FCC Chairwoman Jessica Rosenworcel on November 20, the lawmakers expressed their apprehensions regarding Dahua’s divestiture of its U.S. subsidiary, Dahua Technology US, to Luminys Systems, a company reportedly associated with the Taiwanese entity Foxlink. They suspect that this transaction may be a calculated strategy to bypass U.S. regulations that restrict the sale of Dahua’s products, including video surveillance systems, due to the company’s connections to the Chinese Communist Party (CCP) and its alleged role in human rights violations in Xinjiang. Although Luminys characterized the deal as a means of expanding its business presence in the U.S. market, the lawmakers highlighted that available public information indicates that Dahua’s firmware and software will continue to be developed and managed in China.
This situation raises concerns that the sale could be a tactic to evade legal restrictions, such as those outlined in Section 889 of the National Defense Authorization Act (NDAA), which prohibits U.S. government procurement of products from Chinese firms like Dahua. The lawmakers underscored the potential risk that Dahua might assert it no longer produces these products, thereby avoiding the FCC’s new device authorization requirements and NDAA-related prohibitions. In their letter, they called on the FCC to thoroughly examine the transaction and provide updates to relevant congressional committees to ensure that national security safeguards remain strong and that foreign entities cannot exploit regulatory gaps to continue offering surveillance technologies linked to the Chinese government. This request comes amid ongoing efforts by U.S. agencies, including the FCC, Department of Defense, and Department of Commerce, to address the national security risks posed by Chinese-made communications and surveillance equipment.
