Earlier this month, the US government put Xiaomi on a military blacklist compiled by the US Department of Defense, seeking to ban American investment in the company and forcing existing shareholders to divest their holdings in Xiaomi by November this year. Xiaomi promptly released a statement making it clear that it is not affiliated with the Chinese military, adding that it will take an ‘appropriate course of actions to protect the interests’ of shareholders and the company as a whole. Well, that course of action is finally here, as Xiaomi has filed a lawsuit against the US government that challenges its inclusion on the military blacklist.
Xiaomi says the blacklisting will cause imminent, severe, and irreparable damage
“Xiaomi Corp. sued the U.S. Defense and Treasury departments, challenging a blacklisting that blocks American investors from buying the Chinese smartphone giant’s securities. The lawsuit came after the Defense Department determined earlier this month that China’s biggest smartphone maker was affiliated with the People’s Liberation Army,” says a Bloomberg report. Xiaomi is pursuing a court ruling to end the blacklisting and has called the move unconstitutional.
The Chinese electronics giant says it will suffer imminent, severe, and irreparable damage if the restrictions imposed by the blacklisting go into effect. However, Xiaomi is among many other Chinese brands that have recently been put on the list, with some of the renowned names being HUAWEI, drone-maker DJI, and semiconductor giant SMIC, all three of which have made it to the Entity List as well.
Xiaomi claims it is not controlled by - or affiliated with - the Chinese government or military
In its filing, Xiaomi has stressed that it is not controlled by – or affiliated with – the Chinese government or military. The company also mentioned in its original statement that it provides products and services intended for civilian and commercial use. Weighing in on the whole scenario, many experts had noted that the order might get reversed under new US President Joe Biden, and that the blacklisting lacks merits.
“The Department is determined to highlight and counter the People’s Republic of China’s (PRC) Military-Civil Fusion development strategy, which supports the modernization goals of the People’s Liberation Army (PLA) by ensuring its access to advanced technologies and expertise acquired and developed by even those PRC companies, universities, and research programs that appear to be civilian entities,” the US Department of Defense said back then regarding the addition of new names -including Xiaomi – to the military blacklist.