US Court Orders Review of Pentagon Blacklist for Drone Maker DJI

A US appeals court has sent the case of Chinese drone giant DJI back to a lower court, questioning the basis for its inclusion on a Pentagon blacklist. The US Court of Appeals for the District of Columbia Circuit ruled that the lower court improperly relied only on unclassified information when concluding that DJI supports Beijing's military. DJI, the world's largest drone manufacturer, is among a growing number of Chinese firms challenging their designation as companies supporting China's defense industrial base. This designation restricts the Defense Department from contracting with these firms, with a broader ban on purchasing their products through third parties set to take effect in 2027. The appeals court noted that there was "no publicly stated rationale for why the Secretary believes DJI contributes to the Chinese defence industrial base." It suggested the district court could examine classified records to determine if the Secretary's decision should be upheld. DJI has consistently denied any ties to the Chinese military, stating it is "neither owned nor controlled by the Chinese military." The company has argued that its placement on the list is "unlawful and misguided," leading to lost business deals, reputational damage, and bans from contracting with federal agencies. While the appeals court rejected some of DJI's arguments, it found merit in the claim that the unclassified record did not sufficiently support the conclusion of the company's contribution to China's defense industrial base. This ruling comes as the Pentagon expands its blacklist, reflecting concerns over China's military leveraging its private sector for advancements amid ongoing geopolitical tensions.

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There is ... no publicly stated rationale for why the Secretary believes DJI contributes to the Chinese defence industrial base.