A US federal court has upheld DJI’s inclusion on China’s military contractors list. The judge found the Pentagon’s evidence “compelling,” despite the company’s objections.

DJI loses court case: company remains on China’s US military contractors list

US federal judge Paul Friedman has refused to remove drone maker from the US Department of Defense’s list of companies that “contribute to China’s defense industry.”

Friedman said the evidence provided by the Pentagon was “compelling,” including the use of modified DJI drones in Russia’s war against Ukraine. “Whether the company prohibits the military use of its drones is irrelevant. DJI’s technology has a significant military application,” the ruling said.

DJI’s arguments

In its lawsuit, the company argued that it was “not owned or controlled by the Chinese military” and that its products were intended for consumer and commercial use. DJI said the designation had caused it financial and reputational harm, including loss of business.

However, the court agreed with only part of the Pentagon’s arguments, rejecting some additional grounds for the designation.

Further risks

Company is already subject to sanctions by several US agencies, including the Commerce Department and the Treasury Department. In addition, the company could face a new threat: a ban on the sale of its drones in the US could come into effect in December if national security agencies deem them to be an “unacceptable risk.”

They said it was considering legal options to appeal, stressing that the court’s decision was based on “a single argument that can be applied to many companies that were never on the list.”