A few weeks ago, a news story emerged that caught the tech industry off guard. The United States government placed Xiaomi on a blacklist indicating that the Asian giant was considered a "Chinese military company". This blacklist is different from the one that Huawei and ZTE entered, being considered less serious and with less retaliation.
Later, Xiaomi responded by pointing out that the company has always been in compliance with all international trade laws, and denied any type of connection with the Chinese armed forces, which was hinting at the United States government. Following this guideline, the company began the process of legal actions to try to reverse this situation under its own arguments based on an “unconstitutional prohibition”. In the end, Xiaomi's "counter-claims" have yielded positive results.
Xiaomi has won the lawsuit against the United States and is removed from the blacklist
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| Source: Twitter |
Now an American court has ruled in favor of Xiaomi. With this, the Chinese company is no longer prohibited from attracting investors from the United States. More specifically, the person responsible for this decision has been Rudolph Contreras, a federal judge of the District of Columbia.
In his ruling, the judge annulled the determination of the Defense Department to include Xiaomi in the blacklist of companies that pose a risk to national security because they are related to the Chinese armed forces.
This victory by Xiaomi represents the first of a large Chinese company against the policy of sanctions and restrictions against large companies of the mentioned country that the United States government has had in recent years. It could also be good news not only for Xiaomi but for other Chinese giants. With this victory, a precedent could be set in future lawsuits of these companies against sanctions.
Background of the sanction
In January, the Donald Trump administration issued the order referred to in this ruling. This prevented Americans from investing in Xiaomi. It also gave them a time limit to dispose of their shares in the company.
The sanction in question is less serious than that applied to Huawei and ZTE in their day. Xiaomi never had a ban on access to key hardware or software that directly affected its business of phones and other technology products. This could be because Xiaomi does not have a direct stake in the 5G networking business, while Huawei and ZTE do directly.
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