Moolenaar, Krishnamoorthi Expose PRC Drone Company Masquerading as U.S. Firm – sUAS News

Chairman John Moolenaar (R-MI) and Ranking Member Raja Krishnamoorthi (D-IL) of the House Select Committee on the Strategic Competition Between the United States and the Chinese Communist Party wrote to the CEO of Anzu Robotics, demanding answers about his company’s relationship with People’s Republic of China (PRC) military drone company, DJI. In separate correspondence to Secretary of Commerce Gina Raimondo, the lawmakers outline overwhelming evidence of Anzu’s concerning relationship with DJI and request that the Commerce Department consider steps to address the threat of Anzu, along with a similarly problematic drone maker, Cogito Tech Company Ltd.

In the letter to Anzu’s CEO Randall Warnas, Moolenaar and Krishnamoorthi write, “[S]ecurity researchers have confirmed that Anzu’s Raptor T is essentially a DJI Mavic 3 painted green, with its remote control and application all running on DJI technology… Based in part on your own statements, it appears that DJI is using Anzu as a passthrough company in an attempt to avoid current and anticipated U.S. restrictions on DJI products. Even more disturbingly, we found that Anzu’s CEO admitted in a recent interview that the primary purpose of the DJI-Anzu relationship was to circumvent growing U.S. legislative restrictions on DJI products.”

They continue, “The nature of the DJI-Anzu relationship appears to defy common business conventions. For instance, Anzu claims that DJI is providing its industry-leading drone technology to it through a license that gives ‘Anzu Robotics the rights to modify and manufacture this technology at will. There are no royalties shared with the licensing organization, no joint or shared ownership of Anzu Robotics, and no reporting on customer data.’ On top of that, according to presentations that Anzu provided, DJI is also providing ‘priority technical support’ for all Anzu drones. Given these facts, it is hard to understand the business rationale for DJI to enter into this relationship aside from using it as a passthrough to circumvent legal restrictions (current and prospective) placed on its products.”

Because of Anzu’s deeply problematic ties to the PRC military drone company DJI, Moolenaar and Krishnamoorthi request answers to the following questions from Anzu’s CEO, including:

• On what date did Anzu first publicly disclose that its drones are rebranded DJI products or otherwise heavily rely on DJI technology and parts? Why did Anzu not disclose its relationship with DJI until after public reporting already confirmed that Anzu was effectively selling rebranded DJI products?
• Anzu has stated that “there are no royalties shared with the licensing organization” (DJI).Elsewhere, Anzu has acknowledged that “roughly half of Anzu’s parts come from China. Much of its software originated there. Anzu licensed the design for its drones from DJI, which receives a payment for every drone that Anzu orders from its manufacturer in Malaysia.”
• Please provide the Select Committee with a copy of all contractual arrangements between your company and DJI (or any affiliated entity).
• Please list the name, location, and contact information of the Malaysian factor(ies) and any other factories, in the PRC or otherwise, that produces parts for Anzu products.
• Please list the name, location, and contact information for all entities that contributed to the software and firmware that is found within Anzu products.
• Anzu has stated on its website that DJI receives no royalties for its work with Anzu, but has acknowledged in interviews that DJI receives a payment for every drone that Anzu orders from its Malaysian facility. Please describe all benefits that DJI receives for its licensing agreement with Anzu, including (but not limited to) all forms of revenue generation, access to markets, and data acquisition.
• Why is DJI apparently providing technical support for Anzu products?
• What steps have you taken to ensure that DJI does not extract data from U.S. customers when engaging in this technical support?
• Please list all Anzu Robotics drone parts manufactured in factories owned or controlled by PRC companies such as DJI. These include DJI-affiliated facilities operated outside of China.
• Please list all DJI-produced chips contained onboard Anzu products and the chips’ functionalities, including ability to input or output data through WiFi, 5G, or other means.
• DJI is listed on multiple U.S. government restricted lists for aiding the People’s Liberation Army and facilitating genocide, among other harmful behavior. Anzu’s drones contain many of the same parts and inherently the same vulnerabilities as DJI products. Does Anzu acknowledge that its products fall under the same restrictions in the United States as DJI? If not, what are Anzu’s legal and technical arguments for a contrary position?
• Please provide a chronology of Anzu’s engagement with DJI, including any discussions with DJI that occurred prior to the formal establishment of your company in contemplation of its establishment.
• Please also describe the nature of your personal employment by DJI from 2015 to 2017.

Background:

Over the last year, Congress and regulators have taken action to counter the national security threat posed by PRC drone companies and address serious concerns related to DJI’s operations in the United States. Numerous officials have outlined the unacceptable risks that DJI poses, including its deep partnership with the People’s Liberation Army, its expressed allegiance to the Chinese Communist Party, its surveillance technology operating across U.S. soil, and that same technology equipping the CCP’s genocide of the Uyghur people in Xinjiang.

As a result, the House passed the Countering CCP Drones Act, which would prohibit DJI technology from accessing U.S. communication networks if signed into law. The Pentagon placed DJI on its blacklist as a ‘Chinese military company.’ The Treasury Department forbids Americans from investing in DJI. The Commerce Department restricts U.S. companies from exporting technology to DJI. DJI has sought to escape prohibitions and anticipated bans on their products by white labeling its products through a new company based in Texas, Anzu Robotics. Recent research has revealed that ‘Anzu Drones’ are apparently DJI drones painted a different color, operated by DJI software and technology.

Click HERE to read the lawmakers’ letter to Anzu.

Click HERE to read the lawmakers’ letter to Secretary Raimondo.