Chinese drone maker added to US entity list that bans it from importing US tech without express permission

It really would not be 2020 if it did not end with another jab into DJI’s ribs by the US government, would it?

Following years of back-and-forth accusations about the security of the Chinese drone manufacturer’s products – which the US government maintains are used to, or at least capable gathering information on US soil and sending it to the Chinese government where it will be used for espionage purposes – the federal government upped the ante when it grounded more than 800 DJI drones under the employ of the Department of Interior.

Never mind all of DJI’s protestations of innocence – which were backed by independent inquiries – and certainly never mind that the ban negatively affected the government’s response during the fire season. A stand had been taken, and a stand had to be kept.

Now, with this annus horribilis winding down to a close, it should come as no surprise that DJI has been placed on an entity list by the federal Department of Commerce, which list bars US companies from selling commodities that DJI will use on their products.

According to the US Bureau of Industry and Security (BIS), an entity list is a catalogue that “identifies foreign parties that are prohibited from receiving some or all items subject to the EAR (Export Administration Regulations) unless the exporter secures a license.

“These parties present a greater risk of diversion to weapons of mass destruction (WMD) programs, terrorism, or other activities contrary to US national security and/or foreign policy interests. By publicly listing such parties, the Entity List is an important tool to prevent unauthorised trade in items subject to the EAR. BIS can add to the Entity List a foreign party, such as an individual, business, research institution, or government organization, for engaging in activities contrary to US national security and/or foreign policy interests. In most instances, license exceptions are unavailable for the export, re-export, or transfer (in-country) to a party on the Entity List of items subject to the EAR. Rather, prior license authorization is required, usually subject to a policy of denial.”

What this means for the manufacturer is that if any of their products were being made with components imported from the USA, that supply chain will stop rolling. Consumers in the USA will still be able to purchase DJI products – only that they will be short of US-made components and software on them; just like it was when DJI’s fellow Chinese compatriots, Huawei were banned from using US technology on their products. You can still buy a Huawei phone or a computer – just don’t expect to use Google or Facebook or Microsoft products on it.

What is interesting is the reason given by the government to place DJI on the blacklist. It was not the usual charges of DJI products posing a security risk to the American people – rather the BIS said DJI had “facilitated the export of items by China that aid repressive regimes around the world, contrary to US foreign policy interests” and “enabled wide-scale human rights abuses within China through abusive genetic collection and analysis or high-technology surveillance.”

It is quite possible that there are people and governments out there in the world who might have abused DJI drones and used them for nefarious surveillance purposes. But drone technology abuse charges can be laid on any drone product out there. Not that we wish to defend DJI – they have a team capable of doing that themselves – but we do not understand how it can be DJI’s fault if somebody abuses their drones for purposes they were not originally intended for. It is not like DJI drones come with a manual on how to abuse human rights and spy on unsuspecting people.

But then, reason does not matter for competitors in a cutthroat world where the only prize worth fighting for is market dominance.

American drone makers have not wasted time in trying to occupy the space being left by DJI on the American drone market.

“Based apparently on DJI’s support for abhorrent human rights violations, today’s addition of DJI to the entity list sends an unmistakable message: DJI does not share our values and cannot be trusted,” said Brendan Groves, Head of Regulatory and Policy Affairs at Skydiio. “DJI had already acknowledged its obligation to share sensitive information collected in the U.S. and around the world with the Chinese Communist Party–a serious security risk. Now we learn that DJI has profited for years by supporting the suppression of the Uighurs in Xinjiang province–the world’s most egregious example of human rights abuses. Today’s news also sends an unmistakable signal to the marketplace: companies should think twice about doing business with a known violator of human rights.”

Auterion added their voice by asking prospective drone clients looking to move from DJI to their platform instead.

But cyber security analyst and US/Chine policy expert, Samm Sacks is not convinced by this latest assault against DJI, which some have described as industrial protectionism.

“The addition of the Chinese drone maker DJI is notable because it is yet another sign of the way in which the Entity List has expanded as a tool to go after companies tied to human rights abuses,” Sacks said. “DJI made a solid case that it does not pose a national security risk to the United States through multiple US-government initiated third-party audits that found that DJI drones do not collect data (if set to certain modes on consumer devices or in the US government edition). Instead, DJI’s alleged ties to Chinese government security services in Xinjiang is likely behind their Entity List designation.

“The move follows earlier tranches of Chinese companies added to the Entity List due to their ties to Xinjiang (in October 2019 and June and July 2020). Since the incoming Biden team is likely going to take a hardline approach on human rights in China, it is unlikely that they will seek to reverse course.”

In a short statement, DJI expressed their disappointment on the latest attempt to derail their monopoly on the drone industry.

“DJI is disappointed in the U.S. Department of Commerce’s decision. Customers in America can continue to buy and use DJI products normally. DJI remains committed to developing the industry’s most innovative products that define our company and benefit the world.”

The new list also includes 60 other Chinese companies and research institutions, including Kuang Chi, which has invested heavily in aerospace start-ups with a particular emphasis on drones – two of which are in Canada.