FCC Implements Categorical Prohibition on All Foreign-Produced UAS and UAS Critical Components

In addition to the restrictions on foreign-produced UAS and UAS critical components, the new Covered List entry also applies stricter prohibitions against “all communications and video surveillance equipment and services listed in Section 1709(a)(1) of the FY25 National Defense Authorization Act.” Section 1709(a)(1) specifically identifies Shenzhen Da-Jiang Innovations Sciences and Technologies Company Limited (DJI) and Autel Robotics as named entities (the “Section 1709 Entities”) and prohibits each entity—and any affiliate, subsidiary, or contractual vehicle of each—from selling communications or surveillance equipment or services generally, in the U.S. market, whether produced domestically or abroad.

The Covered List
Pursuant to the Secure and Trusted Communications Networks Act of 2019 (Secure Networks Act), the PSHSB is required to keep an up-to-date list of “communications equipment and services produced or provided by any entity” that, based exclusively on the determination by one or more of four exclusive sources, “poses an unacceptable risk to the national security of the United States or the security and safety of United States persons.” The potential sources, as listed in Section 2 of the Secure Networks Act, include “any executive branch interagency body with appropriate national security expertise” and “an appropriate national security agency.” To date, the Covered List has exclusively focused on communications and surveillance products and services from named entities, each tied to either China or Russia.

The effects of the Covered List have been expanding since its inception. Initially, the Secured Networks Act provided that the Covered List prohibits review or approval of equipment authorizations applications of devices for or that incorporate “covered” equipment, as well as the use of Universal Service Fund sources to purchase “covered” equipment and services. More recently, the FCC has expanded the Covered List restrictions into its  , and is adopting associated restrictions on certification bodies (Bad Labs) involved in the certification process.

The Foreign UAS Public Notice
As required by Section 1709(a) of the FY2025 NDAA, the FCC received a National Security Determination (NSD) from an Executive Branch interagency body, concluding that, in light of several upcoming mass gathering events, such as the World Cup and Olympics, and the general need to protect U.S. national security and cybersecurity, UAS and UAS critical components produced in foreign countries “pose unacceptable risks, given the threats from unauthorized surveillance, sensitive data exfiltration, supply chain vulnerabilities, and other potential threats to the homeland.”

Within a day of receiving the NSD, the PSHSB released the Public Notice to add the following “Foreign UAS Entry” to the Covered List:

Uncrewed aircraft systems (UAS) and UAS critical components produced in a foreign country [incorporating the definitions included in the associated National Security Determination] and all communications and video surveillance equipment and services listed in Section 1709(a)(1) of the FY25 National Defense Authorization Act (Pub. L. 118-159).

The Foreign UAS Entry places a broad prohibition on all “UAS” and “UAS critical components” “produced in foreign countries.”

UAS. The Public Notice adopts the existing definition of “UAS” under Section 88.5 of its rules, defined as “the uncrewed aircraft (UA) and its associated elements (communication links, uncrewed aircraft stations, and components that are not onboard the UA, but control the UA) that would be required for the safe and efficient operation of the UA in the airspace of the United States.” The FCC’s rules further define the UA to be “an aircraft operated without the possibility of direct human intervention from within or on the aircraft.”

UAS Critical Components. Both the NSD and FCC recognize that there is no existing definition of “UAS critical components.” Instead, both documents provide a broad, non-exhaustive list of components, and are to be treated as inclusive of any associated software:

• Data Transmission Devices
• Communications Systems
• Flight Controllers
• Ground Control Stations and UAS Controllers
• Navigation Systems
• Sensors and Cameras
• Batteries and Battery
• Management Systems Motors

Produced in a Foreign Country. Notably, and aligned with the stated objectives of the Administration, the prohibition is location-based. The Foreign UAS Entry does not distinguish between UAS and UAS critical components made by foreign entities abroad or those produced outside the United States by U.S.-owned, operated or affiliated entities. Nor does the prohibition differentiate between U.S. allies and competitors or adversaries. The restriction is a blanket prohibition on foreign production unless covered by one of two exemptions.

The Section 1709 Entities. Section 1709 of the FY2025 NDAA provides specific prohibitions for the two entities named in its provisions, separate and apart from the broad restrictions being placed on other location-based UAS and UAS critical component producers. The Section 1709 Entities are subject to a more “traditional” restriction under the Covered List. The two entities—DJI and Autel Robotics—as well as their subsidiaries, affiliates or partners, or any joint venture or technology sharing or licensing agreement with such entities, for any communications or surveillance equipment or services are prohibited from selling any products or services the United States. This means that, with respect to the Section 1709 Entities, the restrictions extend beyond just drone production and would also include any attempts to set up production within the United States, as well.

Implementation 
Under FCC rules, equipment on the Covered List is prohibited from receiving or being included as part of an application for equipment authorization. Entities and individuals applying for equipment authorization—a requirement for products that use or incorporate radiofrequencies before being marketed or made commercially available in the United States—are required to certify that the equipment is not and does not include “covered” equipment. This certification will now apply to any entities seeking authorization for UAS or counter-UAS systems in the United States, including those with applications that are currently pending, but not yet granted, before the FCC. Telecommunication Certification Bodies (TCBs) will also be tasked with reviewing equipment authorization applications to assess compliance with the Covered List.

***UAS applicants are reminded to ensure applications are up to date and contain accurate certifications given the changes to the Covered List.***

The Exemptions
While most foreign production has been effectively blocked from the U.S. market by the Foreign UAS Entry on the Covered List, the Public Notice does provide two notable exemptions:

• Existing Equipment Authorizations. UAS and UAS critical components that have already received an FCC Part 2 equipment authorization may continue to be imported, marketed, and sold in the United States. However, no modifications, amendments or other updates can be made to existing authorizations.
• U.S. Department of War (DOW) or U.S. Department of Homeland Security (DHS) Waiver. DOW or DHS can make “a specific determination to the FCC that a given UAS or class of UAS [or given UAS critical component] does not pose such [national security] risks.”

While it is unclear from the Public Notice what a DOW or DHS waiver process will look like, or how it would be implemented by the FCC once made, some standardized waiver process is likely to be implemented. Such processes are also anticipated to cover existing processes like the Defense Contract Management Agency Blue List.

The Public Notice also clarifies that the effects of the listing are not initially retroactive. This action does not affect continued use of drones previously purchased or acquired by consumers. However, moving forward, the FCC may place restrictions on previously-authorized covered equipment, including an outright prohibition, using additional enforcement mechanisms at its disposal.

Takeaways
With immediate effect and without notice, the Foreign UAS Entry substantially expanded the scope and potential impact of what had been expected to be a targeted action regarding the Section 1709 Entities. The consequences of this addition to the Covered List will directly and indirectly affect entities across the UAS and counter-UAS industry. Both international and domestic entities within the UAS ecosystem should carefully review the Public Notice and assess its anticipated impacts on operations, supply chain, and contracts.

Companies currently selling or seeking to sell UAS and UAS critical components produced outside the United States that want to continue their U.S. sales should consider actively engaging with their business partners and the U.S. Government to both make a waiver request and avoid contract cancellation prior to adjudication of any such requests.

For more information about the above Public Notice, the Covered List or compliance with these regulations generally, please contact the authors.