DJI has recently been added to the U.S. Department of Commerce “Entity List.” Some people are calling this a “ban” on DJI, the world’s biggest drone manufacturer. It is not a ban, but what does this mean for the future of DJI? And, what the heck is the “Entity List?”
At the time of posting this article DJI was still selling. Check the availability of drones on DJI.com.
What is the “Entity List”
The following is directly from the U.S. Department of Commerce’s website for the Bureau of Industry and Security. Here is some history on where the list came from, it was originally designed for the security of the United States.
“BIS first published the Entity List in February 1997 as part of its efforts to inform the public of entities who have engaged in activities that could result in an increased risk of the diversion of exported, reexported and transferred (in-country) items to weapons of mass destruction (WMD) programs. Since its initial publication, grounds for inclusion on the Entity List have expanded to activities sanctioned by the State Department and activities contrary to U.S. national security and/or foreign policy interests.”
The Department of Commerce also adds,
“The Export Administration Regulations (EAR) contain a list of names of certain foreign persons – including businesses, research institutions, government and private organizations, individuals, and other types of legal persons – that are subject to specific license requirements for the export, re-export and/or transfer (in-country) of specified items. These persons comprise the Entity List”
So it is pretty clear already that this has nothing to do with importing DJI products to the States, it is all about exporting goods from the US. It is not immediately clear to us whether this applies to goods made by U.S. companies, or just goods made in the U.S. We suspect the latter, but we are checking with legal experts.
Why was DJI Banned?
The short answer is ‘political reasons.’ But the reason provided by the Department of Commerce is that DJI conducted “wide-scale human rights abuses within China through abusive genetic collection and analysis or high-technology surveillance.”
We here at Half Chrome are highly skeptical of this claim. Even if DJI equipment was used for surveillance, we are not aware of any evidence that they helped the Chinese government develop facial recognition, for example, that was intended for human rights violations. Regardless, that’s the reason given by the department of commerce.
The impact on DJI goes well beyond their ability to get parts from the United States. We think the biggest impact is on the perception of prospective customers. DJI has been under attack for allegations of spying inside the United States already, and now they also have to explain away alleged human rights violations. They say there is no such thing as “bad press,” but we think this, in fact, a black eye for DJI, even if it is not deserved.
The inability of DJI to import items to China from the US may have an immediate effect on their ability to produce drones and camera equipment. For example, DJI sells thermal camera components made by U.S.-based FLIR. The extent to which China’s supply chain extends into the US is not immediately clear to us. After all, they source 1000s of components to build their products.
DJI is still able to sell in the US, but…
DJI already responded to the action by the Department of Commerce with the following statement:
“DJI is disappointed in the U.S. Department of Commerce’s decision. Customers in America can continue to buy and use DJI products normally. DJI remains committed to developing the industry’s most innovative products that define our company and benefit the world.”
Indeed, we can still find DJI products for sale on Amazon.com, DJI.com, and others. But there is still bad news. Until DJI can find second sources for their U.S.-sourced components they may be limited to selling whatever inventory they have. We recommend buying anything you were on the fence about before supplies run out, which is a distinct possibility given the popularity of their products.
The trickle-down effects
The Chinese government has already threatened retaliation. Even without actions from the Chinese government, suppliers to DJI inside the US will have their businesses impacted by this action.
How it affects YOU
The good news is that this is not an actual ban or blacklisting. Your drone will still fly! In fact, you should buy another before they run out! Prices are likely to go up and supply is likely to go down. With DJI having little competition at many price points, people will likely be scrambling to buy DJI drones
As for us at Half Chrome, we are eyeing the new FPV drone and maybe a Ronin SC. We have all of the Phantoms and Mavics that we can use already. If you haven’t bought your DJI Mini 2 or Mavic Air 2 yet, then now is probably the time!
When will we back to normal?
Regulation is often easier to do than to undo, and we fear that will be the case here. The incoming Biden administration is unlikely to make the Entity List a focus of their first 100 days, or the first year for that matter. We think DJI’s best bet is to use their connections inside the FAA to try to accelerate the process.
What alternatives to DJI are there?
If you want to steer clear of DJI for now then there are a handful of really good drones out there made by other manufacturers. Check out our list of our top ten favorite drones that aren’t made by DJI.
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