According to Bloomberg, on May 13, local time, Chinese lidar manufacturer Hesai Technology officially sued the U.S. Department of Defense due to dissatisfaction with being included in the list of so-called "Chinese military-related enterprises" by the United States. Lidar is a key component of autonomous vehicles.
In a complaint filed in federal court in Washington on March 13, Hesai said that the U.S. Department of Defense's inclusion on the so-called "1260H list" had caused the company to "damage its reputation, plummet its stock price, and lost business opportunities," and shelved its plans to build a factory in the United States. Hesai urged the court to rule that the U.S. Department of Defense remove it from the list or declare it unconstitutional.
According to Reuters, the U.S. Department of Defense said it did not respond to the lawsuit. Previously, YMTC, which is also on the list, also refuted allegations that the company "poses a threat to U.S. national security."
In February this year, Hesai was listed on the NASDAQ in the United States. (Source: Hesai Technology official website)
Founded in Shanghai in 2014, Hesai Technology is a leading global LiDAR R&D and manufacturing company, and its products are widely used in passenger and commercial vehicles, autonomous vehicles, autonomous vehicles, unmanned delivery vehicles, AGVs, and other intelligent robot applications that support advanced driver assistance systems (ADAS). Hesai has offices in Shanghai, Silicon Valley and Stuttgart, with clients in more than 40 countries. In February this year, Hesai was listed on the NASDAQ in the United States and is "the first LiDAR stock in China".
On January 31 this year, the U.S. Department of Defense released an updated list of "Chinese military-related enterprises" operating directly or indirectly in the United States in accordance with the statutory requirements of Section 1260H of the National Defense Authorization Act for Fiscal Year 2021, adding more than a dozen Chinese enterprises. In the updated version, a total of 73 Chinese companies were included in the so-called "1260H list", including Hesai Technology, YMTC and other technology companies.
In response, Hesai Technology immediately responded that the company does not sell products to any military in any country and has nothing to do with any military, and is disappointed that it has been included in the so-called "military-related" list by the US Department of Defense.
Reuters analyzed on February 1 that the United States launched this list to highlight and restrict Chinese companies that are considered to be likely to cooperate with the Chinese military and enhance China's military capabilities. The report claims that while the listed companies will not be immediately barred from doing business in the United States, they may "deal a blow" to the company's reputation, and mean that the US government has issued a serious warning to US entities and companies that doing business with Chinese companies on the list has so-called "risks".
Subsequently, Hesai Technology issued a statement on February 7 saying that the U.S. Department of Defense's decision was wrong, unjust, and unfounded, and decided to sue the U.S. Department of Defense to defend the company's legitimate rights and interests in order to protect the company's reputation. YMTC, also on the list, said on Feb. 7 that as a private company, YMTC is not owned or controlled by the Chinese military, and rejected any allegation that the company posed a threat to U.S. national security. The company said it was working with the U.S. government to resolve YMTC's inclusion on the "1260H list," which was imposed without prior notice to YMTC.
On May 13, local time, Hesai Technology formally filed a lawsuit against the U.S. Department of Defense in federal court, demanding that the U.S. Department of Defense provide reasons for including the company in the so-called "1260H list".
The indictment alleges that the U.S. Department of Defense "did not give Hesai any opportunity to warn, explain, or defend itself" before issuing the list.
Hesai's lawyers wrote in a filing that the company designs and manufactures only commercial and civilian products, and that "no Chinese government or military entity attempts to exert influence or control over Hesai's management, strategy, or R&D operations." ”
The company also said that its plans to build a manufacturing plant in the United States were disrupted by the U.S. Department of Defense's inclusion on the relevant list, leading to further negotiations being put on hold.
Source: Hesai Technology's official website
For some time, US politicians have frequently hyped up the so-called "security risks" of Chinese companies. In April, the U.S. House of Representatives' Select Committee on China urged the Pentagon to ban connected cars using Chinese lidar technology from entering U.S. military bases.
Bloomberg also mentioned that there have been previous examples of Chinese companies successfully defending their rights by suing the US Department of Defense.
In 2021, during Trump's presidency of the United States, the U.S. Department of Defense tried to use the so-called "Chinese military-related enterprises" list to suppress Chinese companies, and COMAC, Xiaomi, and AMEC were included in the list. Xiaomi later filed a lawsuit against the U.S. Department of Defense, calling its actions "illegal and unconstitutional" and denying any ties to the Chinese military.
In March 2021, the U.S. District Court for the District of Columbia ordered the suspension of the U.S. Department of Defense injunction. The judge found that the U.S. government's actions were "arbitrary and capricious" and deprived Xiaomi of its legitimate legal rights. In May 2021, the U.S. government acknowledged that there were procedural justice issues with Xiaomi's inclusion on the list, and was willing to settle with Xiaomi and remove the company from the list.
The report mentions that other companies have also tried to overturn the U.S. Department of Defense's list without resorting to court. IDG Capital, which has offices in Beijing and Hong Kong, said in February that it was working to clear the "chaos" caused by its inclusion in the list.
In response to the U.S. Department of Defense's addition of Chinese technology companies to the list of so-called "suspected of helping the Chinese military", Chinese Foreign Ministry spokesperson Wang Wenbin said at a regular press conference on February 1 that China firmly opposes the U.S. side's generalization of the concept of national security, the establishment of a discriminatory list of various names, the unreasonable suppression of Chinese companies, and the undermining of normal economic and trade cooperation between China and the United States. The US has violated the principle of market competition and international economic and trade rules that it has always flaunted, undermined the confidence of foreign companies in investing and operating in the US, and harmed the interests of US companies and investors.
Wang Wenbin said that in fact, the U.S. government is the main driver of the military-civilian integration policy. The U.S. military-civilian integration policy can be traced back to before World War I, when the U.S. Department of Defense set up offices in Silicon Valley and other important science and technology towns to guide high-tech enterprises to accelerate the "militarization" and "actual combat" of technology. Many large U.S. multinational corporations are "civil-military integrations", and their business scope and product types span the military-civilian field.
China urges the US to immediately correct the above-mentioned discriminatory practices and provide a fair, just and non-discriminatory environment for Chinese enterprises to operate. China will continue to firmly safeguard the legitimate and lawful rights and interests of its enterprises.
Source: Observer.com