Navigating Uncharted Waters: Essential Insights for Chinese Companies and Executives in US Criminal Trade Secrets Cases

Summary

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• Although the 'China Initiative' has formally been concluded, the U.S. government's stance towards Chinese corporations remains challenging
• Chinese companies and their executives can find themselves under investigation or even subject to prosecution for theft of trade secrets, often alongside or following civil cases; competitor companies can be particularly vulnerable
• Executives and employees of Chinese companies named in trade secrets cases may personally be indicted, sometimes unawares
• S. discovery rules can be complex and access to information can prove difficult
• Representation by appropriately experienced U.S. counsel is vital

The "China Initiative" launched by the U.S. Department of Justice (DOJ) in November 2018 claimed to prioritize the criminal investigation and prosecution of the theft of trade secrets and economic espionage. The China Initiative served as an umbrella term for cases with any connection to China, no matter how tenuous. Under the initiative, Chinese companies and their executives have been indicted, leading to challenging criminal legal battles.

Although the China Initiative was formally concluded in February 2022, anti-Chinese sentiment persists, fueled by ongoing U.S.-China political tensions. The general stance towards Chinese corporations remains largely unchanged, with efforts by U.S. lawmakers as recent as September 2024 to revive the China Initiative. Geopolitical frictions continue to create uncertainty and a challenging business environment for Chinese companies in the U.S.