Regulatory intelligence for US exporters

Chinese Firm to Sue DOD for Designation as Chinese Military Company

Hesai Technology, the largest Chinese lidar company by sales, plans to sue the Pentagon for adding it to a list of companies with ties to China’s military (see 2402010018), the company announced Feb. 8. Hesai was added to the list “without any explanation or justification,” CEO Yifan Li said, calling the U.S. decision “unjust, capricious, and meritless.”

Li said Hesai “is not a military company” and its products “are for civilian use only and have never been designed or validated for military use.” The company said there is an “intensive lobbying effort on Capitol Hill against us,” which has been “orchestrated by lidar competitors with the aim of exploiting anti-China sentiment in the U.S. to handicap the undisputed market leader for unfair commercial advantage.” The House Select Committee on China in November asked the Biden administration to investigate all Chinese lidar technology companies to determine whether they should be placed on the Entity List or made subject to U.S. investment restrictions (see 2311290044).

Firms added to DOD’s list of Chinese military companies, also known as the 1260H List, aren’t subject to export controls or sanctions. But Akin Gump said some companies may still screen against 1260H List entities as part of their compliance programs, partly because of the “reputational considerations associated with such a listing.”

The Pentagon didn't respond to a request for comment.