US government adds DJI to Commerce blacklist over ties to Chinese government

By Chaim Gartenberg

Photo by Vjeran Pavic / The Verge

DJI — one of the largest and most popular drone companies in the world — has been added to the US Department of Commerce’s Entity List, designating the Chinese company as a national security concern and banning US-based companies from exporting technology to the company.

DroneDJ first reported the news, which was confirmed by Reuters based on a conference call with a senior commerce official. The Department of Commerce did not immediately respond to a request for further details. DJI declined to comment.

The ban was put in place through the same mechanism as the US government’s ongoing ban on Huawei products, and is primarily focused on blocking the export of US technology to the drone-maker. As such, the ban will make it difficult for US businesses to provide parts or components for DJI to use in its drones, which is likely to disrupt the company’s supply chain. It may also make it difficult for US stores to directly sell DJI products or transact with the company, particularly if China responds to the action with further restrictions.

The ban is set to go into effect when the list is officially updated at 11:15AM ET.

The new additions to the entity list came alongside a more specific action against China’s Semiconductor Manufacturing International Corporation, or SMIC, which was listed in response to purported ties between the company and the Chinese military.

Less explanation was given for DJI’s addition to the list, although Commerce said other companies were added “for actions deemed contrary to the national security or foreign policy interest of the United States.” This is likely a reference to DJI’s involvement in providing drones to the Chinese government to surveill detention camps in the Xinjiang provice, as detailed in a Bloomberg Businessweek report.

But the United States government has also cited several concerns in the past over security issues with the drones, which are largely made in China and contain Chinese parts. The Department of the Interior has announced plans to ground its drone fleet as it reviews whether there are any major security concerns of Chinese spying or cyberattacks. And the Department of Justice banned buying foreign-made drones — which includes DJI’s products — using agency funds back in October, citing similar security concerns. The Department of Defense has certified several other drones from competitors like Parrot and Skydio for governmental use instead, after several years of review.

It’s a significant escalation in President Trump’s ongoing efforts to block Chinese tech companies from operating in the United States. Trump placed Huawei on the entity list by executive order in May 2019, citing national security concerns. Europe and the UK have largely declined to follow suit and continue to use Huawei hardware in their telecommunications networks. Trump took similar measures to block TikTok and WeChat from being hosted in US app stores, although the efforts were held up by court challenges and both apps remain widely available.

It is unclear whether President-elect Biden will continue these policies after taking office on January 20th.