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Business Crimes BulletinFeaturesInternational LawRegulation

DOJ's China Initiative Poses Growing Risks for Those with Chinese Ties

By John N. Joseph, Carolyn H. Kendall and Yune D. Emeritz
November 01, 2020

Over the past decade, scientists of Asian descent — mostly Chinese and Chinese American — have faced increasing government scrutiny into whether they are acting as agents for Chinese businesses and governmental entities. In 2018, the Department of Justice announced its China Initiative (the Initiative), a new policy dedicated to prosecuting economic espionage, trade secret theft, hacking, and other economic crimes done for the benefit of Chinese private and governmental entities. According to the Department of Justice (DOJ), "[a]bout 80 percent of all economic espionage prosecutions brought by [DOJ] allege conduct that would benefit the Chinese state, and there is at least some nexus to China in around 60 percent of all trade secret theft cases." Press Release, DOJ, Information About the Department of Justice's China Initiative and Compilation of China-Related Prosecutions Since 2018. The Initiative also increased DOJ's focus on "non-traditional collectors [of information]," defined as individuals who are not spies, but instead are professors, students, and other ordinary citizens coopted to gather and transfer valuable information and technologies contrary to the United States' interests. DOJ, Attorney General Jeff Session's China Initiative Fact Sheet.

In the two years since it's unveiling, the Initiative has expanded its scope from prosecutions of individuals suspected of stealing for China to those who simply have Chinese ties. The department is now increasing its mission to investigate individuals who are merely associated with Chinese recruitment programs like the Thousand Talents Plan (TTP), which the DOJ alleges is a program to "encourage the [illegal] transfer of original ideas and intellectual property from U.S. universities to Chinese government institutions." United States v. Tao, No. 2:19-cr-20052-JAR-1, Superseding Indictment at ¶ 2 (D. Kan. 2019).

In our global world where cross-jurisdiction collaboration in business and academia is common and encouraged, the DOJ's intense scrutiny and suspicion of China poses new risks for those who collaborate, even innocently, with Chinese entities. This article provides an overview of the Economic Espionage Act, DOJ's primary enforcement tool in this area, and other relevant laws and discusses recent prosecutions of non-traditional collectors in this emerging enforcement trend.

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