DJI challenges its ‘Chinese military company’ Pentagon designation in court

DJI has filed a lawsuit against the US Department of Defense over its addition to the Pentagon list that designates it as a “Chinese military company.” In its filing, shared by The Verge, the company said it’s challenging the designation because it’s “neither owned nor controlled by the Chinese military.” It described itself as the “largest privately owned seller of consumer and commercial drones,” mostly used by first responders, fire and police departments, businesses and hobbyists.

The company claimed that because the Pentagon has officially proclaimed it as a national security threat, it has suffered “ongoing financial and reputational harm.” It also said that it has lost business from both US and internal customers, which terminated contracts and refused to enter new ones, and it has been banned from signing contracts with multiple federal government agencies.

DJI explained that it tried to engage with the Department of Defense for over 16 months and submitted a “comprehensive delisting petition” on July 27, 2023 to get the agency to remove its designation. However, the agency allegedly refused to engage in a meaningful way and to explain its reasoning behind adding the company to the list. On January 31, 2024, the DoD redesignated the company without notice, DJI wrote in its complaint. DJI alleged that the DoD only shared its full rationale for its designation after it informed the agency that it was going to “seek judicial relief.”

The company claimed that the DoD’s reasoning wasn’t adequate to support its designation, that the agency confused people with common Chinese names and that it relied on “stale alleged facts and attenuated connections.” DJI is now asking the court to declare the DoD’s actions as unconstitutional, describing the Pentagon’s designation and failure to remove it from the “Chinese military company” list a violation of the law and of its due-process rights.

DJI has long been at the crosshairs of various US government agencies. The Department of Commerce added it to its entity list in 2020, which prevented US companies from supplying it with parts without a license. A year later, it was added to the Treasury department’s “Chinese military-industrial complex companies” list for its alleged involvement in the surveillance of Uyghur Muslim people in China. And just a few days ago, DJI confirmed that its latest consumer drones are being held at the border by US customs, which cited the Uyghur Forced Labor Prevention Act. The drone-maker denied that it has manufacturing facilities in Xinjiang, the region associated with forced Uyghur labor.