Alibaba Group Holding Ltd. sued the U.S. government in federal court in San Jose, California, seeking removal from the Defense Department’s Section 1260H list after the Pentagon added the company to its June 8, 2026 update covering 188 entities.
In a June 10 Federal Register notice, the Defense Department said Alibaba met the statutory criteria based on an indirect affiliation with China’s State-Owned Assets Supervision and Administration Commission and an affiliation with the Ministry of Industry and Information Technology. Alibaba said in a June 9 filing in Hong Kong that the designation was a mistake, that there was no basis to classify it under the list, and that it is not involved in U.S. military procurement.
Reuters reported that Alibaba’s court filing said the determination had no basis in fact or law, described the company as having an independent board and business lines focused on retail, logistics and enterprise information technology, and sought relief from alleged reputational and business harm.
Under the 2025 National Defense Authorization Act, restrictions tied to the Section 1260H list begin on June 30, 2026, when the Defense Department is barred from entering into, renewing or extending contracts for goods, services or technology with listed entities or their affiliates, with additional indirect procurement restrictions scheduled for 2027. Alibaba said the listing does not by itself impose export controls or sanctions and does not prohibit parties other than the Defense Department from doing business with the company or trading its securities.