On May 11, the U.S. Department of Defense agreed to remove Chinese smartphone maker Xiaomi Corp. from its list of Communist Chinese Military Companies. DOD identified Xiaomi as a CCMC on January 14, pursuant to Section 1237 of the 1999 National Defense Authorization Act. As a result of the CCMC designation, Xiaomi would have been prohibited from selling securities to U.S. investors under Executive Order 13959, “Addressing the Threat from Securities Investments that Finance Communist Chinese Military Companies,” as amended by EO 13974.
The agreement to remove Xiaomi from the CCMC list follows a March 12 preliminary injunction by the D.C. District Court, enjoining enforcement of the EOs against Xiaomi. The Court cited the Administrative Procedure Act in finding that DOD did not develop sufficient evidence to support its designation of Xiaomi as a CCMC.
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