ibusinesslines.com November 14, 2018

US charges Chinese companies in trade secrets theft

03 November 2018, 11:46 | Erica Roy

Attorney General Jeff Sessions announced criminal charges and an operation to thwart Chinese economic espionage. | AP

Attorney General Jeff Sessions speaks during a news conference to announce a criminal law enforcement action involving China at the Department of Justice in Washington Thursday Nov. 1 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.

United States Attorney General Jeff Sessions has announced an initiative that will deal with Chinese trade theft cases, saying there should be an end to "cheating". "We are here today to say, 'enough is enough.' We're not going to take it anymore", said Attorney General Jeff Sessions at a press conference.

The prosecution comes amid heighted trade tensions between China and the USA, and as American officials raise alarms about the threat of Chinese economic espionage. In the meantime, Washington is signaling that the gloves are off.

Xi said he was "very happy" to talk to Trump again and that he would like to see him at the G20 summit in Buenos Aires later this month, adding that the two countries should "push for a mutually acceptable solution to China-US economic and trade issues", according to state media. It is wrong. It is a threat to our national security.

"This initiative will identify priority trade theft cases and ensure we have enough resources dedicated to them", Sessions said.

Ltd. and three individuals, accusing them of conspiring to steal business secrets from Idaho-based semiconductor company Micron Technology Inc. Its shares fell as much as 2.9 percent Friday.

This week, the Trump administration imposed restrictions on technology exports to the indicted Chinese company, Fujian Jinhua Integrated Circuit Co. Chen also hired former MMT employees J.T. Ho and Kenny Wang to allegedly bring trade secrets over from Micron.

In January 2018, in retaliation for the criminal indictments filed by Taiwan authorities and the civil lawsuit filed by Micron in Federal Court in California, UMC and Jinhua filed patent infringement suits in Fujian Province, China, against Micron's China subsidiaries.

Chen later became the President of Fujian Jinhua and was put in charge of said DRAM factory, estimated at a whopping $5.7 billion. The U.S. also sued to stop the companies from exporting to America any products that were created using the trade secrets.

Micron, based in Idaho, is the only USA -based company that manufactures DRAM.

The indictment charged that the Chinese operation involved the downloading of over 900 Micron confidential and proprietary files that were stolen.

The grand jury indictment targeting UMC, Fujian Jinhua, and the three individual conspirators was filed with Northern District Court of California on September 27 in the U.S. It was released to the press on November 1.

One of the charged individuals had been general manager and chairman of a company that Micron acquired in 2013 and then went to work two years later for UMC, where prosecutors say he orchestrated the theft.

The charges against Jinhua and UMC follow a string of government cases against individuals accused of attempting to steal information on behalf of China.

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

China and the United States are locked in an escalating trade conflict.

The attorney general described it as a "brazen scheme" to steal and clone technology in order to compete with the US. "It is unacceptable. It is time for China to join the community of lawful nations".

Congress in August passed the Foreign Investment Risk Review Modernization Act to expand the government's power to review investments from foreign countries - a response to China's efforts to obtain USA technology through mergers, acquisitions and takeovers.

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