DJI sues the US Department of Defense for labeling it a ‘Chinese Military Company’

DJI, the world’s largest drone company, is suing to debar being seen arsenic a instrumentality of the Chinese government. On Friday, it sued the US Department of Defense to delete its sanction from a database of “Chinese Military Companies,” claiming it has nary specified narration to Chinese authorities and has suffered unfairly arsenic a effect of that designation.

Since DJI was added to that database successful 2022, the institution claims, it has “lost concern deals, been stigmatized arsenic a nationalist information threat, and been banned from contracting with aggregate national authorities agencies,” and that its employees “now endure predominant and pervasive stigmatization” and are “repeatedly harassed and insulted successful nationalist places.”

It besides alleges that the DoD would not connection the institution immoderate mentation for its designation arsenic a “Chinese Military Company” until DJI threatened a suit this September, and claims that erstwhile the DoD yet offered up its reasoning, it was filled with errors.

The US Department of Defense didn’t instantly respond to a petition for comment. You tin work DJI’s afloat statement that it’s not owned oregon controlled by the Chinese subject successful the ailment below:

Regardless of whether the DoD has capable grounds to statement DJI this way, it’s acold from the lone subdivision of the US authorities that’s been inclined to restrict and scrutinize the institution implicit imaginable ties to the Chinese government. The US Army asked units to halt utilizing DJI drones as aboriginal arsenic 2017. In 2019, the US Interior Department grounded its fleet of DJI drones implicit spying risks.

In 2020, the US Department of Commerce added DJI to its Entity List, banning US companies from exporting exertion to DJI aft it “enabled wide-scale quality rights abuses wrong China done abusive familial postulation and investigation oregon high-technology surveillance.”

In 2021, the US Treasury added DJI to its list of Non-SDN Chinese Military Industrial Complex Companies, penning that it had provided drones to the Chinese authorities truthful it could behaviour surveillance of Uyghurs, and suggesting that DJI was complicit successful superior quality rights maltreatment arsenic a result.

Some US authorities entities were restricted from buying caller DJI drones pursuing these assorted actions. And this past week, DJI reported that some of its drones person been blocked by US customs utilizing the Uyghur Forced Labor Prevention Act arsenic justification.

In its defense, DJI has repeatedly claimed it isn’t owned oregon controlled by the Chinese government, that it’s had “nothing to bash with attraction of Uyghurs successful Xinjiang,” that it’s simply selling drones that whitethorn beryllium utilized for assorted purposes that are retired of its power afterwards, that galore of those purposes person helped entities (including archetypal responders) successful the United States, and that autarkic audits by consulting firms and US authorities agencies (including the DoD) person recovered nary information threats.

While DJI does admit successful the ailment that 2 Chinese state-owned concern funds did marque number investments successful the company, it claims the Shanghai Free Trade Zone Equity Fund has “less than 1% of DJI’s shares and little than 0.1% of DJI’s voting rights,” and that the Chengtong Fund ended its concern successful June 2023.

Congress is besides considering a implicit import prohibition of caller DJI drones and different instrumentality successful the United States by suggesting they airs a earthy information hazard — though that prohibition is presently connected ice. While the House of Representatives did o.k. it aft it was tacked onto the must-pass National Defense Authorization Act, the Senate’s mentation of the measure doesn’t presently incorporate the prohibition (though it mightiness inactive adhd it back).

But until the US customs hold-up, which DJI is suggesting is conscionable a misunderstanding, the US authorities hadn’t taken immoderate actions that would support stores from importing drones, consumers from buying them, oregon idiosyncratic pilots from flying them successful the United States. Even should Congress prohibition caller DJI drones from being sold, the projected substance of those bills suggests existing owners could support flying the ones they own.