DJI has appealed a Washington, D.C. court decision that allows the U.S. Department of Defense to keep the drone maker on its list of “Chinese military companies.” The appeal, filed this week with the U.S. Court of Appeals for the D.C. Circuit, follows a District Court ruling that upheld the Pentagon’s classification on limited grounds while rejecting several of the government’s broader allegations.
In September, the District Court declined to endorse claims that DJI is owned or controlled by the Chinese Communist Party or tied to China’s Ministry of Industry and Information Technology. The judge instead found that the company contributes to what the Court described as the “Chinese defense industrial base.” Though narrower than the Pentagon’s original rationale, that finding was enough to sustain the designation under Section 1260H of the National Defense Authorization Act.
The designation is symbolic but significant. Being listed as a Chinese military company does not directly impose trade sanctions on the company itself. Yet, it restricts federal investment, complicates procurement, and signals to regulators and contractors that the firm poses a potential national-security risk. DJI has appeared on the Defense Department’s list since 2022 and already faces export-control barriers under the Commerce Department’s Entity List, which limits access to U.S. components and technology.
DJI disputes both the legal and factual basis of the ruling. In a press release issued on October 14, the company said:
“We respect the Court’s process but are disappointed that the designation remains in place despite findings that reject the core of the DoD’s allegations. We will continue to defend the integrity of our company as the findings reaffirm what we have maintained all along — that DJI operates independently, has no government or military affiliation, and is committed to the responsible development of drone technology.” - DJI PR Team
The company’s statement frames the decision as a procedural rather than a substantive one. It argues that the Court found “no basis” for claims of Communist Party ownership or direct state control, and describes the remaining findings—its National Enterprise Technology Center certification and the dual-use nature of drones—as ordinary traits of commercial innovation, not signs of military collaboration.
The Court, however, placed more weight on dual-use implications than DJI acknowledges. The judge noted that DJI’s products serve both civilian and military purposes, a condition Congress considers sufficient for inclusion on the 1260H list. While the ruling confirmed that no evidence ties DJI’s corporate structure to China’s armed forces, it concluded that the company’s technology still supports capabilities applicable to that defense sector.
The decision drew a clear line between ownership and contribution. The Court rejected claims that the Chinese Communist Party indirectly owns or controls DJI but found enough evidence to suggest the company contributes to China’s defense industrial base. The ruling also recognized the commercial impact of that designation. According to DJI, some clients have cut ties, and U.S. Customs officials have delayed imports following separate allegations of forced labor — allegations the company denies.
The appeal arrives amid intensifying U.S. scrutiny of Chinese hardware across critical sectors. Under a law passed last December, federal agencies must complete a national security review of Chinese-made drones by the end of 2025 or face an automatic ban on their import and operation within the United States. DJI said in July that it has received no notice of such a review. The outcome of that process, together with the appeal, will determine whether the company’s commercial drones remain available to American consumers and enterprise users.
The dispute centers on how broadly the U.S. government defines “military company.” The Pentagon’s interpretation extends beyond ownership or direct collaboration to encompass firms whose technology possesses measurable defense value, even if it originated in civilian markets. DJI argues that this reasoning penalizes innovation shared across borders and industries. It points out that its National Enterprise Technology Center designation—a Chinese government certification for advanced research—is also held by companies in the food processing and apparel industries, none of which face military accusations.
The appeal may hinge on how the appellate judges balance statutory intent against the deference owed to administrative agencies. If the D.C. Circuit agrees that dual-use potential alone justifies the listing, DJI’s challenge will likely fail. If the panel requires more substantial proof of active contribution or coordination with China’s armed forces, it could narrow or remand the decision to the Defense Department for clarification.
The case highlights the tension between technology policy and national security, where definitions evolve more rapidly than the law can keep pace. DJI’s drones dominate the global civilian market, used by photographers, infrastructure inspectors, and first responders. The same accessibility that fueled the company’s success has also driven fears that its systems could be repurposed for surveillance or combat.
DJI remains on the Defense Department’s list, and the Court continues to treat its products as contributing—however indirectly—to China’s defense base. The company says it has never built military hardware, marketed drones for combat, or approved modifications that enable such use. Since 2022, DJI has enforced policies that bar distributors from selling to customers who intend to weaponize its products and has warned that it will end partnerships with those who violate these rules.
The appeal tests whether DJI’s current policies and practices satisfy the legal standards behind the Defense Department’s designation. Trade restrictions, federal reviews, and evolving definitions of national security continue to shape how the company operates in the United States. The Court will decide where the boundary lies between civilian and military technology.
