US Federal Communications Commission plans vote to ban sales of sanctioned devices

The Federal Communications Commission is preparing to vote on a measure that would ban sales of devices containing components from companies on its sanctions blacklist.

The vote would extend existing prohibitions that have been tightening since the passage of the Bipartisan Secure Equipment Act of 2021. That law prohibited the FCC from issuing new equipment authorizations to companies on its so-called Covered List, a roster of firms the agency considers risks to national security.

Who’s on the list and why it matters

The Covered List includes Huawei, ZTE, Hytera, Hikvision, and Dahua. These five companies manufacture everything from networking gear and two-way radios to the security cameras watching over countless businesses and government facilities.

The FCC first banned new equipment authorizations for these firms back in November 2022. But that initial prohibition left a loophole. Devices that had already been authorized could still be imported and sold. The upcoming vote aims to close that gap.

On June 26, the FCC announced a ban on imports of certain previously authorized equipment from these companies, set to take effect in early July. The planned vote would go further by targeting the sale of devices that use components sourced from Covered List manufacturers, even if those components are embedded in products made by other companies.

The testing problem

Approximately 75% of electronics are tested in China, according to available data. That statistic alone explains why the FCC has also been exploring proposals to block Chinese labs from testing US-bound electronics.

If the FCC follows through on restricting Chinese testing labs, device manufacturers would need to find alternative facilities to certify their products for the US market.

What this means for investors and the tech industry

For device manufacturers and importers, the immediate concern is compliance. Companies that source components from Covered List manufacturers will need to audit their supply chains and potentially find alternative suppliers.

Security camera installers who rely on Hikvision or Dahua equipment, for example, will need to pivot to alternative brands.

Testing labs outside China stand to benefit if the FCC restricts Chinese testing facilities. Labs in South Korea, Japan, Taiwan, and Europe could see a surge in demand.

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