Not all smartphones are available in all markets, but it isn’t exactly difficult to purchase those via online retailers these days. Network compatibility and local regulations aside, it’s definitely possible to get phones working in unsupported territories. That goes the same for territories where there might be legal restrictions in where certain companies can export to. Xiaomi, however, might be taking a more proactive stance on that front by blocking phones that have been activated in markets where it has an export ban.
There is a small number of countries where the majority of the world’s allied nations have agreed not to export their goods. Some companies have complied with those restrictions lest they get penalized for breaking those trade bans. ZTE, for example, was severely punished by the US government for exporting products that used US technologies and components to those banned countries.
Xiaomi likewise prohibits the export of its phones to countries like Crimea, Cuba, Iran, North Korea, Sudan, and Syria. However, it doesn’t exactly have control over third-party resellers and exporters that may be catering to consumers in those territories. In the past, such consumers have been able to freely buy and use Xiaomi phones, but that might be changing now.
According to reports collated by XDA, Xiaomi is now proactively blocking phones that are operating in these regions. There is a theory that the block is only activated on Xiaomi phones that were activated in those listed countries but not ones that have been activated elsewhere first. Third-party ROMs running on Xiaomi phones are might also be unaffected by the company’s remote blocking system.
Xiaomi is probably treading on legally murky grounds. While its Terms and Conditions clearly prohibit the sale and export of its products to banned countries, it doesn’t state anything about blocking the use of phones there. If proven to be legally sound, it could be a precedent for other manufacturers to follow suit or for countries to pressure these companies to do so.