DJI sues US Department of Defense for labeling it a Chinese military company

DJI, the world's largest drone company, is suing to avoid being seen as a tool of the Chinese government. On Friday, it sued the U.S. Department of Defense to remove its name from a list of Chinese military companies, saying it had no such relationship with Chinese authorities and had unfairly suffered from the designation. .

Since DJI was added to this list in 2022, the company says it has lost business deals, been branded a national security threat, and been barred from contracting with several federal government agencies, and that its employees now suffer from frequent and pervasive stigmatization. are repeatedly harassed and insulted in public places.

It also alleges that the DoD allegedly offered the company no explanation for its designation as a Chinese military company until DJI threatened legal action in September, and claims that when the DoD finally presented his reasoning, it was full of errors.

The U.S. Department of Defense did not immediately respond to a request for comment. You can read DJI's full argument that it is not owned or controlled by the Chinese military in the complaint below:

Whether or not the DoD has enough evidence to label DJI this way, it is far from the only U.S. government entity inclined to restrict and scrutinize the company over possible ties to the Chinese government. The U.S. Army asked units to stop using DJI drones as early as 2017. In 2019, the U.S. Department of the Interior grounded its fleet of DJI drones due to espionage risks.

In 2020, the US Department of Commerce added DJI to its Entity List, banning US companies from exporting technology to DJI after it enabled large-scale human rights abuses in China through abusive genetic collection and analysis or high-tech surveillance.

In 2021, the US Treasury added DJI to its list of non-SDN Chinese military-industrial complex companies, writing that it had provided drones to the Chinese government so it could surveil Uyghurs, and suggesting that DJI was complicit serious violations of human rights. therefore.

Some US government entities have been unable to purchase new DJI drones as a result of these various actions. And last week, DJI reported that some of its drones had been blocked by U.S. customs using the Uyghur Forced Labor Prevention Act as justification.

In its defense, DJI has repeatedly claimed that it is not owned or controlled by the Chinese government, that it has nothing to do with the treatment of Uyghurs in Xinjiang, that it simply sells drones which can be used for various purposes which then escape its control. , that many of these objectives have helped entities (including first responders) in the United States, and that independent audits conducted by consulting firms and U.S. government agencies (including the DoD) have found no security threat.

Although DJI admits in the complaint that two Chinese state investment funds have indeed made minority investments in the company, it claims that the Shanghai Free Trade Zone Equity Fund owns less than 1% of DJI's shares and less than 0, 1% of DJI voting rights. and that the Chengtong Fund terminated its investment in June 2023.

(DJI claims that just four people control 99% of DJI and own 87% of its shares, DJI founder and early employees Frank Wang, Henry Lu, Swift Xie and Li Zexiang.)

Congress is currently considering a total ban on the importation of new DJI drones and other equipment into the United States, suggesting they pose a national security risk, although that ban is currently on hold. Although the House of Representatives approved it after it was added to the National Defense Authorization Act, which must be passed, the Senate version of the bill does not currently contain the ban ( even if she could still add it).

But until the U.S. customs blockade, which DJI says is just a misunderstanding, the U.S. government had taken no action that would stop stores from importing drones, consumers from buying them, or individual pilots to fly them to the United States. Even if Congress banned the sale of new DJI drones, the proposed text of these bills suggests that existing owners could continue to fly the ones they own.

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