US agrees to remove Xiaomi from Communist Chinese military company list

Xiaomi has been taken off the US government's Communist Chinese military companies (CCMC) list, according to a court filing.

In the court filing [PDF], the Department of Defense agreed to remove Xiaomi from the list as it did not wish to appeal a federal court order that blocked the department from placing restrictions on the ability for domestic companies to invest in Xiaomi.

The court filing, submitted as part of a legal action raised by Xiaomi in February, brings an end to the scuffle between the Chinese company and the Department of Defense.

The scuffle first began in mid-January, when the Department of Defense added Xiaomi onto the CCMC list due to its belief that the company was procuring advanced technologies to support the Chinese military.

Companies placed on the CCMC list are subject to a Donald Trump executive order that prohibits US persons from trading and investing in any of the listed companies and bans trading in any new companies once the US has placed the CCMC label on them.

Immediately after Xiaomi received the designation, it criticised the move and denied having any ties with the Chinese military. This then led to the legal action between Xiaomi and the Department, which culminated in District Judge Rudolph Contreras' order to temporarily stop Xiaomi from being added to the list as it would likely cause "irreparable harm" to the company.

In making that order, Contreras also said Defense's justification for adding the Chinese company onto the list was made on "shaky ground".

"Taken together, the Court concludes that Defendants have not made the case that the national security interests at stake here are compelling," he said.  

Since the new year, US entities, such as the New York Stock Exchange, have struggled to handle the consequences and interpretation of the CCMC list. Across the month of January, the exchange said it would delist a trio of Chinese telcos, before changing its mind, and then it reverted to its original decision.

Other Chinese companies currently on the list include Huawei, Hikvision, Inspur, Panda Electronics, and Semiconductor Manufacturing International Corporation.

RELATED COVERAGE