Xiaomi Sues US Government Over Wrongful Blacklisting

Image Source: News18

Earlier this month, the outgoing Donald Trump administration had blacklisted Chinese tech company Xiaomi as well for alleged links to the Chinese military, something that the company is contesting and is calling it factually incorrect.

Xiaomi Corporation is suing the United States Department of Defence and Department of Treasury for listing the company as “Communist Chinese Military Company”. Xiaomi has filed the lawsuit in the United States District Court for the District of Columbia.

 Earlier this month, the Chinese tech company was blacklisted along with 8 more Chinese companies, for alleged links to the Chinese military. The US administration had said then that the ban on the nine Chinese companies including Xiaomi was done accordance with the statutory requirement of Section 1237 of the National Defence Authorisation Act of 1999 in the US. It was one of the last decisions taken by the Donald Trump administration, in its final days in office.

“The company believes that the decision to include the company as a “Communist Chinese Military Company” under the NDAA by the Department of Defence and the Department of Treasury of the United States was factually incorrect and deprived the company of legal due process. 

With a view to protection the interests of the global users, partners, employees and shareholders of the company, the company has pleaded to the courts to declare the decision illegal and that it be reversed,” says Xiaomi in an official statement issued on behalf of Xiaomi Corporation Chairman Lei Jun. It turns out, American investors will be required to divest their holdings in each of the blacklisted firms by November 11, 2021. 

This is because of an executive order signed by President Donald Trump in November 2020, barring Americans from investing in any company that is added to the Department of Defence’s list. Companies previously placed on this blacklist include smartphone maker Huawei and chipmaker SMIC.

While Donald Trump and the US Government vs Huawei has to be one of the lasting memories of the previous US Administration, earlier this month, the Trump administration also blacklisted Chinese tech company Xiaomi as well for alleged military links with the China National Offshore Oil Corp. over the drilling in the South China Sea. 

“The Company reiterates that it provides products and services for civilian and commercial use. The Company confirms that it is not owned, controlled or affiliated with the Chinese military, and is not a “Communist Chinese Military Company” defined under the NDAA. 

The Company will take appropriate course of actions to protect the interests of the Company and its shareholders,” a Xiaomi spokesperson had told News18 hours after the announcement was made. This is a saga that is ongoing, something that the Joe Biden administration will have to tackle.