Xiaomi granted reprieve against investment ban

midian182

Posts: 7,081   +62
Staff member
What just happened? Xiaomi has been granted a reprieve against DoD restrictions that stop U.S. companies investing in the firm. The tech giant will avoid restrictions that come from its addition to a Communist Chinese Military Companies (CCMC) list, at least for now, after it launched a lawsuit against the U.S. treasury and defense departments in the district court of Columbia last month.

Xiaomi was designated a CCMC in January, one of the final acts by Donald Trump's outgoing administration. A 1999 law requires the Defense Department to compile a catalog of companies owned or controlled by the People's Liberation Army. The Pentagon has added 35 companies so far, including Huawei and the Semiconductor Manufacturing International Corporation (SMIC).

Its addition to the list meant Xiaomi was subject to an investment ban that prohibits U.S. companies purchasing its securities or derivatives of those securities. It also forces American investors to divest their holdings on November 11, 2021.

In February, Xiaomi sued the U.S. government over the designation, claiming it is "unconstitutional because it deprives Xiaomi of its liberty and property rights without due process of law," thereby violating the Fifth Amendment.

District Judge Rudolph Contreras issued an initial injunction over the weekend, granting a temporary ban to the restrictions. He said the U.S. case against Xiaomi was "deeply flawed," and it would likely succeed in its lawsuit to remove its designation as a Chinese military-linked company, writes the Financial Times.

Judge Contreras said Xiaomi would likely suffer "irreparable harm" in the absence of the relief, citing its share price falling almost 10% since the CCMC designation, banks suspending shares, and the company losing global contracts. He added that the DoD's memorandum that led to Xiaomi being added to the list was made on "shaky ground."

"[The memorandum] does not explicitly identify the agency's source of authority that governs the CCMC designation process, and when the memo does invoke the relevant statutory language, the excerpted language is quoted incorrectly. These errors do not inspire confidence in the fastidiousness of the agency's decision-making process," he said.

Xiaomi ended up on the list because it was allegedly a national security threat. Contreras said he was "somewhat skeptical that weighty national security interests are actually implicated here."

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

Xiaomi said it was pleased with the outcome and will continue to its case against the DoD to have the CCMC designation removed.

"We believe that the inclusion of Xiaomi in the list of Chinese military-related enterprises is an arbitrary and arbitrary decision, and the judge also agreed with it. We will continue to ask the court to finally rule that the decree is invalid for Xiaomi," it said.

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QuantumPhysics

Posts: 5,229   +5,938
I just think it so hilarious how America's sanctions are steadily being broken down by companies that have grown so powerful and interconnected with the rest of the world that they can simply shrug those sanctions off. Hopefully Venezuela, Cuba and Iran will as well.

It's absolutely ridiculous what the previous Administration tried to do.
 

Puiu

Posts: 4,866   +3,749
TechSpot Elite
I just think it so hilarious how America's sanctions are steadily being broken down by companies that have grown so powerful and interconnected with the rest of the world that they can simply shrug those sanctions off. Hopefully Venezuela, Cuba and Iran will as well.

It's absolutely ridiculous what the previous Administration tried to do.
I can understand Huawei's ban (somewhat), but Xiaomi's ban was truly weird.
 

Burty117

Posts: 4,193   +2,212
I wonder how far the US and UK got with removing Huawei networking equipment from ISP's and what not. I don't actually know, I bet very few people do know.

I'm not a betting man, but if I was to place a bet, absolutely nothing has changed, I bet we still run the majority of our networks using Huawei's equipment...
 

duckofdeath

Posts: 448   +586
I can understand Huawei's ban (somewhat), but Xiaomi's ban was truly weird.
The Xiaomi ban is a show of consistency. The CCP can't just switch their focus to a different brand to get their state controlled hardware out there and expect no consequences. The US and Europe showed to Xi that if he wants to use tech to get a free backdoor into places he's go no business being, that company will fail, no matter how much money it was printing.
 

BadThad

Posts: 616   +657
Judge is a communist sympathizer and should be removed. The Chinese are using our own courts against us. As Americans, we should have NO INTEREST in moving the Chinese agenda forward and putting up road blocks for them as often as possible.
 

BadThad

Posts: 616   +657
I just think it so hilarious how America's sanctions are steadily being broken down by companies that have grown so powerful and interconnected with the rest of the world that they can simply shrug those sanctions off. Hopefully Venezuela, Cuba and Iran will as well.

It's absolutely ridiculous what the previous Administration tried to do.

What's more ridiculous is Americans supporting ANYTHING China. Make no mistake, they are America's #1 enemy. The "previous administration" recognized the threat and acted appropriately. The current administration of clueless buffoons are the opposite and will act in China's interests at EVERY turn.
 

QuantumPhysics

Posts: 5,229   +5,938
Judge is a communist sympathizer and should be removed. The Chinese are using our own courts against us. As Americans, we should have NO INTEREST in moving the Chinese agenda forward and putting up road blocks for them as often as possible.

What's more ridiculous is Americans supporting ANYTHING China. Make no mistake, they are America's #1 enemy. The "previous administration" recognized the threat and acted appropriately. The current administration of clueless buffoons are the opposite and will act in China's interests at EVERY turn.


Those comments sound like McCarthyism.

The previous administration's single and only term should serve as a reminder future administrations going forward.
 

Puiu

Posts: 4,866   +3,749
TechSpot Elite
The Xiaomi ban is a show of consistency. The CCP can't just switch their focus to a different brand to get their state controlled hardware out there and expect no consequences. The US and Europe showed to Xi that if he wants to use tech to get a free backdoor into places he's go no business being, that company will fail, no matter how much money it was printing.
Without any evidence, that's just speculation. It's not like they "switched" brands or did anything different than what we've known so far. On the other hand we do have evidence of US companies doing shady stuff.

As an EU citizen I'm more inclined to criticised what US companies are doing right now with my personal info than what China might do with it.
 

Nobina

Posts: 3,292   +3,370
I'm sure even if you don't use Chinese products there is some US company selling your data to the Chinese anyway.
 

duckofdeath

Posts: 448   +586
Without any evidence, that's just speculation. It's not like they "switched" brands or did anything different than what we've known so far. On the other hand we do have evidence of US companies doing shady stuff.

As an EU citizen I'm more inclined to criticised what US companies are doing right now with my personal info than what China might do with it.
I'm pretty sure most things national security agencies do are based on a bit more than speculation. I can't fix your denial. Just like I can't make a security agency reveal security issues they know of and use themselves to their own advantage.
 

tacobravo

Posts: 158   +180
Xiaomi forgets that it isn't a US company and doesn't have any rights under the US Constitution.

National security trumps the profits of a Chinese Government owned company.
 

Austinturner

Posts: 277   +325
Xiaomi forgets that it isn't a US company and doesn't have any rights under the US Constitution.

National security trumps the profits of a Chinese Government owned company.
Xiaomi almost certainly has a US incorporated entity that would be under US jurisdiction.
 

Austinturner

Posts: 277   +325
Judge is a communist sympathizer and should be removed. The Chinese are using our own courts against us. As Americans, we should have NO INTEREST in moving the Chinese agenda forward and putting up road blocks for them as often as possible.
A judge making a decision based on the laws of your country (It sounds like you are american) does not make them a communist sympathiser. The actions taken by the pentagon have to be consistent with US laws and the judge has granted this injunction because the actions appear to be illegal.

Which country allows its government departments and military to act unilaterally with no recourse? China! Don’t become your enemy, do things the right way. Strengthen the laws and close loopholes through democratic processes if they aren’t working effectively.
 

Puiu

Posts: 4,866   +3,749
TechSpot Elite
I'm pretty sure most things national security agencies do are based on a bit more than speculation. I can't fix your denial. Just like I can't make a security agency reveal security issues they know of and use themselves to their own advantage.
If only. Trump is not known to make decisions based on facts, quite the opposite. You cannot deny this simple fact. This smells, no, it reeks like a political decision. It's not like Xiaomi is selling to the US sensitive equipment in key strategic points like Huawei was doing. Xiaomi's market penetration in the US a lot lower.
 
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duckofdeath

Posts: 448   +586
If only. Trump is not known to make decisions based on facts, quite the opposite. You cannot deny this simple fact. This smells, no, it reeks like a political decision. It's not like Xiaomi is selling to the US sensitive equipment in key strategic points like Huawei was doing. Xiaomi's market penetration in the US a lot lower.
T#### wasn't president when the US started talking about the problem with Huawei. He's also not prez today. The NSA and CIA are a lot less political than you seem to want to think they are.
 

Puiu

Posts: 4,866   +3,749
TechSpot Elite
T#### wasn't president when the US started talking about the problem with Huawei. He's also not prez today. The NSA and CIA are a lot less political than you seem to want to think they are.
Pretty sure I said Huawei had legit reasons, but this is more like an attack on big Chinese companies than anything related to "national security". And it's really weird to consider that the NSA and CIA are outside of the political sphere.

You have to look at what Xiaomi was selling and doing before the ban in the US. Besides imports, you could barely buy anything Xiaomi in the US (from official sources). I doubt their Android TV was being deployed at the Pentagon.
 

duckofdeath

Posts: 448   +586
Pretty sure I said Huawei had legit reasons, but this is more like an attack on big Chinese companies than anything related to "national security". And it's really weird to consider that the NSA and CIA are outside of the political sphere.

You have to look at what Xiaomi was selling and doing before the ban in the US. Besides imports, you could barely buy anything Xiaomi in the US (from official sources). I doubt their Android TV was being deployed at the Pentagon.
It's maybe weird for someone living in an autocracy to think of the law not being political. It's a pretty common way to ensure civil rights in a western state.
Huawei had political reasons, which is the reason they're banned. When a tech company starts spreading malware and selling technology to banned nations, they can't also expect to be allowed to do business in countries prohibiting this.
 

Puiu

Posts: 4,866   +3,749
TechSpot Elite
It's maybe weird for someone living in an autocracy to think of the law not being political. It's a pretty common way to ensure civil rights in a western state.
Huawei had political reasons, which is the reason they're banned. When a tech company starts spreading malware and selling technology to banned nations, they can't also expect to be allowed to do business in countries prohibiting this.

The reasons were these (proven or not):

1. Known close ties to the Chinese government (they were considered to be as close as a branch of the government) and the 2017 Chinese National Intelligence Law
2. Accusations that their telecommunications hardware was used to spy on other countries (special investigations were made, like the one in the UK, but they found nothing besides some potential bugs/sloppy code).
This is a huge difference between Xiaomi and Huawei, as Huawei was installing 5G globally and its network hardware was used by governments and government branches.
3. IP theft in telecommunications
 

duckofdeath

Posts: 448   +586
The reasons were these (proven or not):

1. Known close ties to the Chinese government (they were considered to be as close as a branch of the government) and the 2017 Chinese National Intelligence Law
2. Accusations that their telecommunications hardware was used to spy on other countries (special investigations were made, like the one in the UK, but they found nothing besides some potential bugs/sloppy code).
This is a huge difference between Xiaomi and Huawei, as Huawei was installing 5G globally and its network hardware was used by governments and government branches.
3. IP theft in telecommunications
Stop repeating what I say. Is your Google translator broken?
 

Puiu

Posts: 4,866   +3,749
TechSpot Elite
Yeah, that one you conveniently forgot.
that's your quote dude. seriously now, I know you don't like what I write, but trolling me isn't helping.

I think I made my stance pretty clear now and put forth enough facts. time to end this argument before it devolves into insults. have a good day.
 

BadThad

Posts: 616   +657
A judge making a decision based on the laws of your country (It sounds like you are american) does not make them a communist sympathiser. The actions taken by the pentagon have to be consistent with US laws and the judge has granted this injunction because the actions appear to be illegal.

Which country allows its government departments and military to act unilaterally with no recourse? China! Don’t become your enemy, do things the right way. Strengthen the laws and close loopholes through democratic processes if they aren’t working effectively.

You know NOTHING about American judges whom are often appointed by political parties. American judges have the ability to "legislate from the bench" and WILL use their political bias to spite their foes.
 

Austinturner

Posts: 277   +325
You know NOTHING about American judges whom are often appointed by political parties. American judges have the ability to "legislate from the bench" and WILL use their political bias to spite their foes.
I agree making judges political appointments is a weird quirk of american judicial system, but you do agree that judges still do act according to the law as it is written right? Legislating from the bench may involve interpretation of the laws but can’t change them (and appeals are designed to ensure that is the case).

I don't care about your politics or that of the judge, they have grounds that the actions of the government were likely illegal and now the rest of the process has to play out. I’m reminding you that it is this very process that should set america apart from china.