DJI, the world's largest drone company, has filed a lawsuit to avoid being seen as a tool of the Chinese government. On Friday, he sued the U.S. Department of Defense to remove his name from a list of “Chinese Military Companies,” alleging that he has no such relationship with Chinese authorities and that he has suffered unfairly as a result of that designation.
Since DJI was added to that list in 2022, the company claims, it has “lost business deals, been stigmatized as a national security threat, and been banned from contracting with multiple federal government agencies,” and that its employees “now They suffer frequent and widespread stigmatization” and are “repeatedly harassed and insulted in public places.”
It also alleges that the Department of Defense did not offer the company any explanation for its designation as a “Chinese Military Company” until DJI threatened to file a lawsuit in September, and claims that when the Department of Defense finally offered its reasoning, it was full of errors.
The US 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:
Regardless of whether the Department of Defense has enough evidence to label DJI in this way, it is far from the only US government entity that has been inclined to restrict and scrutinize the company for possible ties to the Chinese government. The US military asked its units to stop using DJI drones as early as 2017. In 2019, the US Department of the Interior suspended its fleet of DJI drones due to espionage risks.
In 2020, the US Department of Commerce added DJI to its Entity List, prohibiting US companies from exporting technology to DJI after it “enabled large-scale human rights abuses within China by collecting and abusive genetic 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 in serious human rights abuses. as a result.
Some US government entities were restricted from purchasing new DJI drones after these various actions. And last week, DJI reported that some of its drones had been blocked by US 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 had “nothing to do with the treatment of Uyghurs in Xinjiang”, that it is simply selling drones that can be used for various purposes that are then outside of its control, that many of those purposes have helped entities (including first responders) in the United States, and that independent audits by consulting firms and the US government agencies (including the Department of Defense) have found no security threats.
While DJI admits in the complaint that two Chinese state investment funds made minority investments in the company, it claims that the Shanghai Free Trade Zone Equity Fund holds “less than 1% of DJI's shares and less than 0 .1% of DJI's voting rights.” ”, and that the Chengtong Fund completed its investment in June 2023.
(DJI says that just four people control 99 percent of DJI and own 87 percent of its shares: DJI founder and early employees Frank Wang, Henry Lu, Swift Xie and Li Zexiang.)
Congress is currently considering an outright ban on the import of new DJI drones and other equipment into the United States, suggesting they pose a natural security risk, although that ban is currently frozen. While the House of Representatives passed it after it was added to the National Defense Authorization Act, the Senate version of the bill does not currently contain the ban (I could still add it back though.).
But until the US customs delay, which DJI suggests is just a misunderstanding, the US government had not taken any action that would prevent stores from importing drones, consumers from purchasing them, or preventing them. Individual pilots will fly them in the United States. . Even if Congress were to ban the sale of new DJI drones, the proposed language of those bills suggests that existing owners could continue to fly the ones they own.
