Rep. Christopher Smith and Sen. Jeff Merkley questioned the retail giant’s continued sale of Lorex products, which have been linked to human rights abuses.
Two bipartisan lawmakers are demanding answers from Costco over its decision to continue selling Chinese-manufactured security products that have been linked to human rights abuses and cybersecurity risks.
In a letter dated Oct. 31, Rep. Christopher Smith (R-N.J.) and Sen. Jeff Merkley (D-Ore.) questioned the retail giant’s continued sale of Lorex security products, noting that the company previously had ties to China-based company Dahua, whose products are restricted in the United States by the Federal Communications Commission (FCC).
Lorex is a former subsidiary of camera maker Zhejiang Dahua Technology, a China-based company that was added to the U.S. trade blacklist in 2019 because of the Chinese Communist Party’s (CCP’s) treatment of Uyghurs and other predominantly Muslim ethnic minorities.
The U.S. Department of Commerce, in placing the company on the blacklist, stated that it and other entities “have been implicated in human rights violations and abuses in the implementation of China’s campaign of repression, mass arbitrary detention, and high-technology surveillance against Uighurs, Kazakhs, and other members of Muslim minority groups” in China’s Xinjiang region.
The FCC last year banned the sale of new telecommunications and surveillance equipment made by Dahua, citing an “unacceptable risk” and national security concerns.
Dahua sold Lorex earlier this year to Taiwanese-based company Skywatch for roughly $72 million.
However, in their letter to Costco CEO W. Craig Jelinek, Mr. Smith and Mr. Merkley said Dahua still supplies all the component parts for the Lorex cameras and other surveillance equipment.
The continued sale of Lorex security equipment throughout the retailer’s stores allows Dahua to profit from the U.S. market despite its equipment being banned from U.S. government use, they argued.
The lawmakers went on to note that Costco’s competitors, including Best Buy, Home Depot, and Lowe’s, have all discontinued the sale of Lorex products, citing human rights and ethical sourcing concerns.
This makes Costco’s continued sale of the equipment “all the more puzzling and seemingly in conflict with your company’s stated commitment to the United Nations Guiding Principles on Business and Human Rights and the International Bill of Human Rights.”
