National Defense Bill Contains Chinese Drone Ban

In a move with significant repercussions for all U.S. users of Chinese-made drones—a group that includes port authorities as well as U.S. farmers, police departments, firefighters and other first responders—the U.S. Senate released on December 7 the final text of the National Defense Authorization Act. Within the defense act is the Countering Chinese Communist Drone Act, which the House passed earlier. The bill, authored by Rep. Elise Stefanik (R-NY), puts Chinese-made drones on the Federal Communications Commission’s (FCC) “covered list.” The bill, if it becomes law, will ban drones made by certain Chinese companies from operating on U.S. networks, citing national security risks.

The bill specifically names the products from Shenzheng Da-Jiang Innovations—also known DJI Technology Company—and Autel Robotics. An earlier bill banning federal agencies from buying or using Chinese-made drones was passed and made into law in 2022.

DJI is the global leader in civilian drones, accounting for an estimated 70 percent of the market worldwide. According to Drone DJ, a drone publication, DJI controls 77 percent of the U.S. domestic drone market and 90 percent of drones used by first responder agencies like police and firefighters. After being introduced to the U.S. market in 2013, DJI quickly dominated the American drone market due to its superior product features and affordable prices. The company’s Mavic camera and video drones remain popular among farmers, forestry workers and real estate companies as well as public agencies. The aircraft regularly win awards and top “best of” lists in drone publications.

The NDAA’s Section 162 calls on the Department of Defense to analyze and dismantle Chinese-built drones to identify supply chain risks. That means investigating vulnerabilities in commercially available drones and developing strategies to minimize reliance on foreign components. The Department of Defense has already been developing lists of approved and security-vetted suppliers of parts and components. Virtually any component with a chip that can communicate to other components is banned if it is made in countries deemed a security threat. Those countries include China, Russia and North Korea. However, certain parts that do not have chips are still allowed.

Drone users have widely anticipated the move by Congress. On January 17, the Federal Bureau of Investigation (FBI) and Cybersecurity and Infrastructure Security Agency (CISA) jointly warned critical infrastructure and state, local, tribal and territorial partners of cybersecurity threats posed by Chinese-manufactured drones. They have since issued several updated warnings.

DJI Responds

DJI has tried to fight back against what it calls misinformation. The company has set up a website that seeks to dispel concerns. It also has formed a U.S. lobbying group of DJI customers, the Drone Advocacy Alliance. DJI denies that it is a military company, makes military-grade equipment or that it has any connection with the Chinese Communist Party, the Chinese People’s Liberation Army or the Chinese government. DJI has even sued the Department of Defense, seeking to be struck from a blacklist of “Chinese military companies.”

But critics point to China’s laws that require any company to provide data to the Communist Party on request at any time and to provide “back doors” on communications equipment to allow party officials access.

“The People’s Republic of China (PRC) has enacted laws that provide the government with expanded legal grounds for accessing and controlling data held by firms in China,” the new guidance states. “The use of Chinese-manufactured [drones] in critical infrastructure operations risks exposing sensitive information to PRC authorities.”

Partnerships Under Scrutiny

DJI has tried to get around any proposed bans by forming licensing partnerships with U.S. companies and manufacturing them in third-party countries not included in defense blacklists. One Texas-based company, Anzu Robotics, signed a licensing agreement with DJI and began making drones in Malaysia based on DJI technology. Drone DJ reported in June that “Anzu has positioned itself as a great DJI alternative by satisfying key geopolitical and cybersecurity concerns for most enterprise and public safety users. As the drone market continues to evolve, such strategic alliances will likely become more common, driving innovation and ensuring that companies can meet the complex challenges of a rapidly changing technological landscape.” However, Anzu drones identical to DJI models are priced around $1,500 to $2,000 more due to the lack of economies of scale. Still, their price point is considered a “bargain” compared to U.S.-manufactured alternatives.

Anzu’s agreement with DJI drew the attention of the House Select Committee on the CCP, which sent letters to Anzu’s CEO, Randall Warnas, asking him to explain his relationship with DJI. While being open about the relationship, Anzu has tried to portray its licensing agreement with DJI as “hands-off” with a number of security safeguards.

In an August letter to Anzu, the committee wrote, “Based in part on your own statements, it appears that DJI is using Anzu as a pass-through company in an attempt to avoid current and anticipated U.S. restrictions on DJI products. Beyond state action and anticipated federal legislation, these restrictions would also include restraints that the Commerce Department, the Department of Defense (DOD) under Section 1260H of the National Defense Authorization Act for Fiscal Year 2021 and other executive branch departments and agencies have already placed on DJI products.”

Another Hong Kong-based company, Cogito Tech Company Limited, registered through the FCC to begin offering drone products in the United States, but some say Cogito’s products are identical to DJI’s, as reported in The Hill.

In October, DJI began warning its customers that the U.S. Customs and Border Protection was blocking the import of some DJI drones (including the just-released Air 3S), citing the Uyghur Forced Labor Prevention Act, which bars the import of goods suspected to be manufactured in Uygher forced-labor camps in the Chinese province of Xinjiang. DJI insists that no forced labor is involved in its production processes and is pushing for a resolution to the customs hold-up, which it calls a misunderstanding.

On its website, DJI disputes claims in the Select Committee’s letter and portrays the measures against it as economic protectionism masquerading as security concerns.