DJI Challenges Military Company Label in US Court

DJI filed a lawsuit Against the US Department of Defense, disputing its inclusion in the list of Chinese military companies. The claim states that DJI does not belong and is not controlled by the Chinese military, and its main activity is associated with the production of drones for commercial and consumer use, including for emergency response services, fire and police departments.

After being included in the list, the company announced serious financial and reputation losses. Clients, both American and international, began to terminate contracts and refuse to conclude new agreements. DJI was also prohibited from concluding transactions with federal agencies of the United States.

The company tried to establish a dialogue with the Ministry of Defense for 16 months, submitting a “Delistering petition” in July 2023. However, according to DJI, the department refused to provide explanations and consider evidence. In January 2024, DJI was re-included in the list, and only after the company announced its intention to apply to court, the department provided justification for its actions. DJI claims that the Ministry of Defense used false and outdated data, including confusion with names and weak ties with the military.

In addition, DJI faced additional problems amidst delays of its new drones at the US border. Customs services cited the law on the prevention of the use of Uyghur forced labor, suspecting that the company’s products may be associated with production facilities in Xinjiang, China, where forced labor is alleged. DJI denied these accusations, stating that the company has no factories in this region and that its supply chain undergoes strict verification.

There are discussions about bills that could completely block the import of DJI products in the United States. While current owners of the company’s drones will be able to continue using them, potential restrictions could significantly impact DJI’s position in the American market. Nevertheless, as of the end of 2021, the company controlled approximately 70% of the global drones market, including up to 90% among US public security services.