Costco Continues to Sell Banned Surveillance Equipment, Lawmakers Say

U.S. lawmakers are questioning Costco’s decision to sell banned Chinese-based security products reportedly linked to human rights abuses and cybersecurity risks. Rep. Christopher Smith (R-NJ) and Sen. Jeff Merkley (D-OR) wrote a letter to the retailer on Tuesday, calling for Costco to remove Lorex surveillance equipment from its shelves.

The lawmakers called it “puzzling” that the retail giant is selling Lorex equipment, which was placed on the Department of Commerce’s “Entity List” for its role in the PRC’s genocide in the Xinjiang Uyghur Autonomous Region. The Federal Communications Commission banned all telecommunications and surveillance equipment owned by the Chinese company, Dahua, which included Lorex products in 2022, for vulnerabilities discovered including “unauthorized viewing of video and audio feeds and archives, as well as unauthorized network access and remote tampering with settings,” Smith and Merkley said in the letter.

Costco has a responsibility to remove such products from its shelves, the letter says, accusing the company of going against its previous commitment to prohibiting international human rights abuses. Costco Wholesaler Corporation has a global Code of Conduct “which prohibits human rights abuses” in its supply chain including human trafficking, physical abuse, restricting freedom of movement, unsafe work environments, excessive or forced overtime, illegal child labor, and many others.

While Smith and Merkley acknowledged that Dahua did sell Lorex earlier this year to Skywatch, a Taiwanese-based company, they wrote the sale “does not allay our concerns or immediately change the security risks posed to U.S. companies and consumers moving forward, as Dahua still supplies all the component parts for the Lorex cameras and other surveillance equipment.”

The letter also says the U.S. government linked Dahua to the Uyghur genocide. The government found it developed “ethnicity tracking” to identify Uyghur, Tibetan, or other ethnic groups that included alert and tracking technology and invasive surveillance technology.

Dahua’s technology aided Chinese police in locating and monitoring the religious activity of Uyghurs and other ethnic minorities as early as 1995, The Guardian reported but officially took hold in 2017. That year, Uyghur were displaced and moved to reeducation camps where they were subjected to forced labor, intense surveillance, and involuntary sterilizations, prompting foreign governments to describe China’s actions as genocide, the Council on Foreign Relations wrote in September 2022.

Costco did not immediately respond to Gizmdo’s request for comment.

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