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U.S. bans investment in Chinese surveillance company SenseTime, saying it supports repression of Uyg

Biden administration calls the sanction part of broad effort to unite democracies against authoritarian states

Technology developed by SenseTime is displayed at a conference on artificial intelligence in Tokyo in 2018. (Kiyoshi Ota/Bloomberg)

By Jeanne Whalen

December 10, 2021 - Updated December 10, 2021 at 10:35 p.m. EST

The Biden administration on Friday banned U.S. investment in a Chinese company that it said supports China’s use of repressive surveillance technology, calling the move part of a broad effort to unite democracies against authoritarian states. The sanction adds the facial recognition company SenseTime to a list of 59 Chinese companies in which U.S. citizens and entities are prohibited from investing. The Biden administration widened that list this summer to include firms that it said support China’s military and state surveillance, building on a Trump administration effort.

The Biden administration announced the move alongside new sanctions on individuals it said were responsible for repression and human rights abuses in Bangladesh, Myanmar and North Korea. It also announced a partnership with other democracies to tighten export controls on technology that can be used for repression. The measures “send a message that democracies around the world will act against those who abuse the power of the state to inflict suffering and repression,” Deputy Treasury Secretary Wally Adeyemo said in a statement. The Treasury Department, which oversees the investment prohibition list, said SenseTime “has developed facial recognition programs that can determine a target’s ethnicity, with a particular focus on identifying ethnic Uyghurs,” a persecuted Muslim minority population in China. It added that China has used digital surveillance technology to track Uyghurs’ movements and activities and to “create a police state in the Xinjiang region.”

In an email, SenseTime spokeswoman June Jin said the company “strongly” opposes “the designation and the accusations that have been made in connection with it.”

“The accusations are unfounded and reflect a fundamental misunderstanding of our company,” Jin wrote. “We regret to have been caught in the middle of geopolitical disputes.”

Biden bans investment in Chinese companies linked to surveillance technology

Scholars estimate that Chinese authorities have detained more than 1 million Uyghurs in centers and reeducation camps for periods ranging from weeks to years. The United States has labeled the campaign a genocide. The United Kingdom pressed China in January to allow United Nations rights inspectors to visit the region, while the European Parliament has condemned China for using forced labor in Xinjiang.

The sanction against SenseTime will complicate its preparations to list its company shares on the Hong Kong Stock Exchange through an initial public offering.

SenseTime is one of China’s largest artificial intelligence companies, pairing cameras and software algorithms for uses that include identity verification and monitoring whether a driver is drowsy or distracted.

The Trump administration began raising alarms about the company in 2019, adding it to an official export blacklist for what the administration called its support of China’s surveillance of Uyghurs and other minority groups in Xinjiang.

That blacklist, called the Entity List, requires U.S. companies to receive a government license before exporting technology to the targeted companies.

The new sanction adds SenseTime to the separate Chinese Military-Industrial Complex Companies List, which prohibits U.S. individuals from buying or selling any publicly traded securities in the companies. Existing investors have one year to divest after a company is placed on the list.

In 2018, several U.S. venture capital funds invested in SenseTime, including Tiger Global Management and Glade Brook Capital Partners, according to market data provider Pitchbook. Those investors did not immediately respond to requests for comment.

Who are the Uyghurs and what is happening to them in China?

SenseTime joins two other Chinese companies, Hangzhou Hikvision Digital Technology and Huawei Technologies, already included on the prohibited investment list for allegedly aiding repressive state surveillance.

The Washington Post reported last year that Huawei had tested facial recognition software that could send automated “Uyghur alarms” to government authorities when camera systems identified members of the oppressed minority group. Huawei at the time said the work was “simply a test and it has not seen real-world application.”

Cameras made by Hikvision have been deployed throughout Xinjiang to monitor Uyghurs in internment camps, according to the Uyghur Human Rights Project, an advocacy group based in Washington.

The Treasury Department also added two Chinese Communist Party officials from the Xinjiang region, Shohrat Zakir and Erken Tuniyaz, to a sanctions list for their role in “serious human rights abuse.” Zakir was chairman of the Xinjiang Uyghur Autonomous Region until 2021. Tuniyaz now serves as the acting chairman.

“During their tenures, more than one million Uyghurs and members of other predominantly Muslim ethnic minority groups have been detained in Xinjiang,” the Treasury Department statement said.

The Biden administration on Friday was wrapping up a two-day “Summit for Democracy,” a virtual gathering aimed at rallying the democracies of the world against the forces of authoritarianism.

As the summit came to a close, the White House said the United States and seven allied democracies have agreed to develop a voluntary nonbinding code of conduct “to use export control tools to prevent the proliferation of software and other technologies used to enable serious human rights abuses.”

The other participating countries are Australia, Denmark, Norway, Canada, France, the Netherlands and the United Kingdom, according to a brief statement on the agreement.

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