The risks and big opportunities of NDAA in the UK and Europe

Jamie Barnfield, Senior Sales Director, IDIS Europe


For systems integrators that don’t yet have NDAA-compliant video manufacturer partners, now is the time to make that connection.  There are growing opportunities for integrators who do work with compliant vendors, and growing risks for those who don’t.

And just to be clear, I’m not talking about manufacturers who simply add a sticker to a box that claims NDAA compliance – or vendors who say “yes, it was made in China, but it was assembled by Japanese technicians” or “yes, it was made in Korea, but just using Chinese components”.

I’m talking about video equipment that can be proved to be 100 percent risk-free in origin, from design, to full component manufacture, to assembly. Because although it may work at the moment to fudge the issue - or not to ask too many questions - that’s not going to work for much longer.

And for integrators there is now a risk.

Because companies that claim to be providing NDAA-compliant solutions, but fail to do so, may leave themselves open to breach of contract claims in the future, if customers can show that they failed to make adequate checks.

For systems integrators that do offer compliant systems, the opportunity we are seeing now is for them to win significant contracts.

Rules getting tighter

NDAA of course is a US law, but its impact is being felt in the UK and Europe.

The UK government is accelerating plans to remove Chinese-made surveillance equipment from all government sites. On June 7th the Cabinet Office announced amendments to the Procurement Bill, which is currently going through parliament, confirming that it now intends to publish “a timeline for the removal of surveillance equipment produced by companies subject to China’s National Intelligence Law”.

One aim of the bill is to make it easier for small businesses to win more of the £300billion of goods, services and works that the government buys each year. So, there’s an opportunity for our industry.

Two new measures, now to be included, are also worth noting: a National Security Unit for Procurement will be established, to investigate suppliers who may pose a risk to national security. and assess whether companies should be barred from public procurements. And new powers are proposed to ban suppliers from the highest risk sectors.

Changing market

On top of previous announcements, this is having an effect. We are already seeing more tenders that stipulate compliance, and not just for sensitive central government projects, but for wider public sector applications (NHS projects, for example) and – significantly - for corporate customers, such as major retailers. They are all asking for NDAA, or NDAA-like, supply assurance.

This attitude shift doesn’t just apply to the UK, but more widely across Europe. Given that trade relations with US are so important, it’s unlikely that the EU will allow the UK to lead the way in transatlantic alignment for long – it will have been noted that the Cabinet Office announcement came hot on the heels of President Biden’s recent constructive meeting with Rishie Sunak.

Although legislation is not yet being proposed in wider European markets, customer sentiment is definitely changing within the EU. Many buyers anticipate that sooner or later rules will be tightened.

To make the most of this opportunity, there are two things that SI’s should be doing.

Risk-free supply

First, they should check, and check again, that their manufacturer really is compliant.

A label may claim ‘not Chinese’ on the box, but that should never be taken at face value.

Right now, there is no regulation, and no authority checking these claims (although that may change in the UK if the National Security Unit for Procurement is established). So when the ‘wrong’ cameras arrive on site, because of human error or because older models were shipped by mistake, no laws are actually being broken. But that doesn’t mean the terms of contracts aren’t being breached, putting reputations and long-term business relationships at risk.  The simplest way to avoid this is to choose a trustworthy brand.

Open doors

The second opportunity for integrators is to explain the importance of genuine NDAA compliance to customers. Increasingly, those that do will be pushing at open doors.

The question of supply chain ethics is being driven up corporate agendas by public sentiment, by the need to protect brand reputations, and by legislation. Many large organisations already have supplier policies in place, anticipating potential rule changes around ESG ratings (Environmental, Social, and Governance) which the UK government is just wrapping up its consultation on.

And organisations that turn over more than £36 million must already publicly report on the steps they are taking to ensure transparency in their supply chain. The Modern Slavery Act 2015, not only focusses on slavery and servitude, forced labour, and human trafficking, it also states that organisations have a legal duty to drive out poor labour practices,

It's been widely reported that some Chinese vendors have been implicated in human rights abuses, which is incompatible with ESG requirements. Cybersecurity is another pressing concern and was a key driver behind the introduction of NDAA in the first place. The risk of major breaches has not gone away, and organisations are continually reminded of the potentially catastrophic consequences.

In the future when breaches are investigated, or when routine system audits are conducted, non-compliant technology might come under the spotlight – and that could be uncomfortable for any installer that supplied a system that they wrongly claimed to be NDAA-compliant. They could leave themselves open to compensation claims, and at the very least, they may be required to rectify their work.

Easy win

But for systems integrators who are ahead on NDAA-compliance this should be an easy win. Comprehensive, end-to-end solutions are available that meet the needs of every application.

And one final point worth making is that pricing is not the issue that it once was. The race to the bottom is well and truly over and when it comes to video tech, and even smaller users are now prepared to pay a sensible price for trusted proven systems that are robust, high performance and backed up by extended warranties.

This good news for our industry and our customers.

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