Xiaomi challenges America with its courts

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The Chinese smartphone manufacturer Xiaomi has filed a lawsuit against the US Treasury and Defense Departments, demanding that the company be removed from the sanctions list, reported by CNBC.

Recall that in mid-January, the US Department of Defense put Xiaomi on the “blacklist” in connection with the alleged cooperation of Xiaomi with the Chinese military. Eight more Chinese companies were also included in the list. Listing means that US companies and investors are prohibited from buying stakes in DOD listed firms. Companies that already own shares in Xiaomi and other listed firms must dispose of these shares by November 11, 2021.

Xiaomi’s lawsuit filed in a District of Columbia court said the decision to sanction suspected military ties deprives the company of liberty and property rights without due process of law and thus violates the Fifth Amendment to the US Constitution. Also, Xiaomi noted that the ban on investors’ purchase of shares would cause irreparable damage to the company’s business.

The Chinese company stressed that Xiaomi does not belong to the authorities or the PRC army, is not controlled by them, or is otherwise associated with them.

Note that many Chinese companies are under US sanctions, including Huawei, which also produces smartphones. Due to US sanctions, Huawei previously lost the ability to install Google services on its new smartphones. Then the US authorities banned companies that use American equipment or software from supplying semiconductors to Huawei to produce devices.

Attempts by Huawei to challenge the legality of the sanctions in court were unsuccessful – due to restrictions imposed by the United States, Huawei had to sell its subsidiary Honor to remove it from the sanctions. According to analysts, the sanctions led to a decrease in Huawei’s share in the global smartphone market in 2020, which was occupied by Apple and Xiaomi.