DJI appeals Pentagon designation as Chinese military company

A U.S. appeals court has ordered a lower court to reconsider the inclusion of DJI, the world’s largest drone manufacturer, on a Pentagon list of Chinese military companies. The U.S. Court of Appeals for the District of Columbia Circuit ruled that the previous decision erred by relying solely on unclassified records when determining if the company contributes to China’s defense industrial base.

On remand, the district court is permitted to examine classified records to determine whether to uphold the Secretary of Defense’s designation. DJI has challenged its placement on the Section 1260H list, arguing the designation is “unlawful and misguided” and has resulted in lost business deals and stigmatization. The company maintains it is “neither owned nor controlled by the Chinese military.”

The Pentagon’s list restricts the Department of Defense from contracting with designated firms, and a broader ban on purchasing their products through third parties is set to take effect in 2027. While a previous ruling upheld DJI's inclusion based on its status as a National Enterprise Technology Center and the dual-use potential of its products, it found insufficient proof that the company is owned or controlled by the Chinese Communist Party.