Xiaomi has filed a lawsuit against the US Department of Defense and the Treasury to reverse the blacklisting decision made earlier this month. The move is forcing US investors to withdraw their investment from Xiaomi by the end of this year, thus prompting Xiaomi to fight back and save itself. It was blacklisted for closely associated with the Chinese military.

Xiaomi Sues US Government

In an appeal to reverse the blacklisting decision made a couple of weeks back, Xiaomi named the US Department of Defense and the Department of Treasury, along with their respective secretaries Lloyd J. Austin and Janet L. Yellen as defendants.

The Chinese tech giant was banned earlier this month for being linked to the Chinese military and may snoop on its customers on behalf of them,  though it denied this allegation. Thus, it was named as a Communist Chinese military Company, along with others’, and blacklisted them altogether.

This is different from putting into Entity List, which would ban the companies from using US proprietary technology. Blacklisted companies face the wrath of the investment sanctions, as the native investors should withdraw their holdings from such companies in a given time span. In Xiaomi’s case, the US investors are given time until November this year to withdraw their holdings.

In its lawsuit, Xiaomi said it “faces imminent, severe, and irreparable harm if the Designation remains in place and the restrictions take effect,” and claims that “Xiaomi is not owned or controlled or otherwise affiliated with the Chinese government or military, nor is it owned or controlled by any entity affiliated with the Chinese defense industrial base.”

While there are a number of retail investors for Xiaomi, the institutional US investors include BlackRock Inc., the Vanguard Group Inc., and State Street Corp being the top ones. Also, Qualcomm too is a major investor in Xiaomi.


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