A U.S. court has ordered a halt to the Defense Department's restrictions on lobbying related to the Chinese company Alibaba.
The U.S. District Court for Northern California issued the injunction on October 26, directing the Defense Department to immediately stop enforcing its ban on transactions with lobbying firms associated with Alibaba.
The court stated, "It is excessive to impose a blanket prohibition on Defense Department contracts with companies linked to lobbying firms simply for assisting Alibaba."
Previously, on June 8, the Defense Department added Alibaba to its blacklist of Chinese military enterprises, known as '1260H,' which includes key technologies such as semiconductors, artificial intelligence, robotics, and drones. This action was taken because Alibaba was alleged to be aiding the People's Liberation Army of China.
The '1260H' list is published annually by the Defense Department under Section 1260H of the National Defense Authorization Act (NDAA) for fiscal year 2021, identifying Chinese military companies operating directly or indirectly in the U.S. The list includes major Chinese tech and manufacturing firms such as Baidu, BYD, and Changxin Memory.
While the designation lacks direct legal consequences, it serves as a warning to U.S. investors and is seen as a potential precursor to more stringent trade sanctions. Furthermore, the NDAA for fiscal year 2025 prohibits the Defense Department from contracting with any entity that lobbies or advocates for companies on the 1260H list starting on the 30th.
The Defense Department declared it would not engage in defense-related contracts with any company even slightly connected to lobbying firms working for Alibaba, which led to numerous lobbying firms terminating their contracts with Alibaba. In response, Alibaba stated, "We have no connection to the People's Liberation Army" and filed a lawsuit along with a request for a temporary restraining order.
Meanwhile, the court did not rule on the legality of Alibaba's inclusion on the blacklist itself. In June, Alibaba had filed a lawsuit against the Defense Department, seeking to be removed from the list of companies supporting the Chinese military.
* This article has been translated by AI.
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