Trump administration charges Chinese companies with spying on U.S.

Cheryl Sanders
November 3, 2018

The Justice program is part of a multi-pronged Trump administration policy of taking action against China for unfair trade practices and technology theft.

In a statement, Micron's general counsel and legal chief, Joel Poppen, said, "Micron has invested billions of dollars over decades to develop its intellectual property".

Lawyer General Jeff Sessions stated, "Chinese monetary espionage on the United States has been increasing, and it has been expanding quickly". "We're not going to take it anymore", Sessions said.

The new initiative comes as the Justice Department announced charges against Chinese chipmakers for stealing trade secrets related to semiconductor computer chips. The two companies could face forfeiture and fines of more than $20 billion. In the meantime, Washington is signaling that the gloves are off.

In addition to the criminal case, the Justice Department also filed a civil lawsuit seeking to prevent the two companies from exporting any products created using trade secrets.

It will be led by Assistant Attorney General John Demers, who heads the National Security Division of the Department of Justice.

The indictment alleges that the companies and the three individuals conspired to steal trade secrets from Micron, a United States semiconductor company worth $100bn (£76bn).

The latest confrontation from the Trump administration is another allegation of economic espionage, this time directed at a Chinese state-owned enterprise and a Taiwanese firm, both of which the U.S. says stole secrets from chipmaker Micron. Its shares fell as much as 2.9 percent Friday.

According to the indictment, the Chinese government set up a state-owned company, Fujian Jinhua Integrated Circuit Co.

The case involves trade secrets worth up to $8.75 billion and allegedly stolen from Idaho-based Micron Technology Inc., and is the latest in a series of prosecutions targeting Chinese corporate espionage.

As per the Justice Department, a former Micron employee in Taiwan joined United Microelectronics Corp (UMC) in 2015 and also recruited two others to join him.

The Justice Department has charged a Chinese firm controlled by its government with the theft of semiconductor technology trade secrets worth almost $9 billion.

"UMC regrets that the U.S. Attorney's Office brought these charges without first notifying UMC and giving it an opportunity to discuss the matter", the company said.

Jinhua is a state-owned enterprise funded by the Chinese government and established to design and manufacture dynamic random-access memory chips, or DRAM.

The indictment charged that the Chinese operation involved the downloading of over 900 Micron confidential and proprietary files that were stolen. China has strongly criticized USA arms sales to Taiwan, and the US has renewed its criticism of Beijing's island-building in the disputed South China Sea.

According to the DOJ, the three individual defendants face up to 15 years imprisonment and $5 million in fines on the espionage counts, with a further 10 years of possible jail time for trade secrets theft.

But since 2017, three people have been charged with spying for China or attempting to spy for China.

The Commerce Department has added Jinhua to an Entity List to prevent it from buying goods and services in the U.S. to limit profitability from stolen tech.

FBI Director Christopher Wray said China poses the most significant threat to the United States.

The charges were the latest in a series of cases targeting what Washington calls an ongoing Beijing programme to steal valuable U.S. industrial and commercial secrets in order to advance the Chinese economy.

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