Chinese flag on China map.

On February 23, 2022, the U.S. Department of Justice (“DOJ”) announced the end of an initiative to prioritize suspected Chinese economic espionage. The intent of the initiative was to prevent China’s intelligence apparatus from stealing U.S. technology, specifically from research institutions and universities. However, DOJ National Security Division Chief Matthew Olsen stated the initiative “fueled a narrative of intolerance and bias” and had a chilling effect on scientific collaboration and recruitment by U.S. research institutions. Olsen’s comments and the policy change concludes a review that Olsen ordered shortly after his confirmation by the Senate.

Since the initiative’s inception, the DOJ’s enforcement efforts were mixed.  While the DOJ has credited the initiative with some major prosecutorial victories, one study found that cases against academics more often resulted in dismissals rather than convictions. Many prosecutions under the initiative involved alleged grant fraud by researchers working at U.S. universities stemming from alleged failures to disclose ties to the Chinese government. Critics cited the lack of success as proof of racial bias and government overreach. As a result of the policy change, the DOJ’s national security prosecutors are expected to more closely supervise grant fraud cases, and the DOJ may seek civil or administrative sanctions instead of criminal prosecutions.

Although the DOJ will likely remain vigilant in monitoring threats posed by China, Olsen indicated the DOJ will also expand its focus to include threats posed by North Korea, Iran, and Russia.  In light of the new conflict in Ukraine, Russia specifically may find itself under increased scrutiny. Nevertheless, individuals and companies with connections to China and other foreign governments should remain diligent in their disclosures and expect the DOJ to continue to scrutinize their activities for possible economic espionage.