DOJ Ends Trump-Era China Initiative

Matthew Olsen, Assistant Attorney General for the Department of Justice’s (DOJ) National Security Division (NSD), announced that DOJ has terminated the “China Initiative.” In a speech to the National Security Institute at George Mason University on February 23, 2022, Olsen explained that the Department’s three-month review of the initiative concluded that the focus on China and Chinese nationals raised unacceptable civil rights concerns. Olsen referred to his service as a Civil Rights Division attorney earlier in his career in emphasizing that the Department must be vigilant in protecting civil rights. He acknowledged that the China Initiative had engendered well-founded opposition from the civil rights community that could undermine confidence in the Department. Olsen also noted that looking at threats from all nation-state actors was the better strategy to advance the country’s national security interests. DOJ’s decision comes after several high-profile acquittals and dismissals of cases brought under the China Initiative.

As regular readers of Enforcement Edge will know, the China Initiative was launched in 2018 by then-Attorney General Jeff Sessions to “develop a coherent approach to the challenges posed by the PRC government.” The NSD’s new approach will seek to counter national security threats from a variety of nation-state actors, given that “no one threat [] is unique to a single adversary.” But, Olsen stated that “it is clear that the government of China stands apart.” For example, China has targeted US citizens with connections to the intelligence community to steal military secrets, used espionage tools against US companies and workers to steal technological information, initiated cyber campaigns to obtain proprietary information, and attempted to censor US journalists, residents, and companies.

To address the challenges posed by China and other nations while respecting the civil liberties of American citizens and academics, Olsen outlined the NSD’s multi-faceted response to “the capabilities of each hostile nation and the full spectrum of activity each country undertakes to achieve its goals.” This response, as Olsen described, will be guided by three strategic imperatives:

• First, DOJ will continue to “defend core national security interests and protect [the country’s] most sensitive information and resources” through aggressive investigations and prosecutions of espionage, export control and sanction violations, and infrastructure interference.
• Second, DOJ will use regulatory authorities and the criminal process to protect key technologies, information, and supply chains from “economic espionage, hostile manipulation and cyber-enabled malicious activity.”
• Third, DOJ will work to defend democratic institutions against rising authoritarianism through the promotion of the “freedom of expression and democracy against corrupt and repressive forces.”

Unlike the China Initiative, which relied primarily on prosecutions to achieve its mission, Olsen noted that DOJ will use all legal tools at its disposal to counter national security threats. The approach will include civil and administrative measures in addition to “prosecuting state agents for espionage, hacking campaigns against our government and the private sector, and the repression of critics, as well as efforts to manipulate public discourse in the United States.” Olsen further emphasized the use of diplomacy and relationship building with communities and allies, both at home and abroad, to create durable partnerships to address and combat criminal activity.

The decision to end the China Initiative and reorient the NSD’s priorities came after consultation with the Federal Bureau of Investigation and US Attorney’s offices. Olsen also noted that DOJ’s review of the China Initiative had not found that any prosecutorial decision had been made based on bias or prejudice. In response to a question following his remarks, he said that the Department had reviewed and would continue to review pending cases to ensure that they were well-founded, but that he was comfortable with the cases that are currently pending.

As Olsen emphasized today, despite the termination of the China Initiative under that name, DOJ will not abandon investigations and prosecutions relating to the national security threats it was intended to address. The decision not to use the term “China Initiative” and to broaden the focus may not have significant impact on DOJ’s ongoing work, and Olsen made clear in his remarks that national security risks have not decreased. Anyone doing business in China must remain vigilant about the risks and understand that law enforcement will continue to investigate and prosecute violations of US law. In addition, companies need to take proactive steps to protect themselves from malicious actions of foreign governments and insider threats. Companies can protect themselves from cyber-attacks by investing in malware defense and by training employees in cybersecurity. Moreover, by maintaining strong BSA/AML compliance programs, reporting malicious activities to the appropriate authorities, and complying with appropriate regulations pertaining to foreign investments and export controls, companies can avoid unwittingly falling victim to national security threats.

It is unlikely you will see another Enforcement Edge blog discussing the China Initiative (readers will notice that there is no longer a China Initiative page on the DOJ website). Nevertheless, we will continue to monitor the actions of DOJ and the NSD as they work to carry out this new strategy. If you have questions, reach out to any of the authors or your other trusted Arnold & Porter contacts.

© Arnold & Porter Kaye Scholer LLP 2022 All Rights Reserved. This blog post is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.