International Trade Enforcement Roundup | November 2…

After the employee sent a document marked “trade secret,” Xu and the employee made plans to meet in Belgium to discuss further. Ultimately, the GE employee disclosed the events to his employer, who engaged the FBI. In Belgium, Xu was arrested as part of a sting operation and extradited to the United States to stand trial. Prosecutors stated that Xu’s activities are part of a broader Chinese policy to “reinnovate” foreign technologies by obtaining trade secrets from non-Chinese aviation companies. In this regard, prosecutors cited an attempt by Xu to leverage “insiders” at a French engine manufacturer and place malware on company computers to infiltrate the company network. Notably. U.S. government agencies continue to warn American companies about Chinese economic espionage efforts. The indictment gives us a behind-the-curtain look into what Chinese tactics look like and offers clues for how (i.e., training personnel) companies should protect against illegal exports of data.

Read the press release here.

Nexperia Ordered to Sell its Controlling Stake in UK’s Largest Semiconductor Factory (UK De- partment of Business, Energy, and Industrial Strategy Action) Those involved. Nexperia BV, a Dutch-headquartered semiconductor manufacturer and subsidiary of Wingtech Technology, a Chinese state-owned communication equipment manufacturer.

Action. The forced sale of 86% of Nexperia’s share capital in Newport Water Fab.

What happened? On July 5, 2021, Nexperia bought 86% of the share capital in Newport Wafer Fab, giving the company 100% ownership of the semiconductor production facility. Following legislation that came into effect earlier in 2022, the UK government took a second look at the acquisition. The decision followed an assessment concluding that the sale presented risks to UK national security given the potential loss of UK technological capabilities.

Read the publication of notice of final order here. Read the Reuters article here.

Notably. The U.S. government has promoted a new national security strategy toward China founded on technological leadership and modern industrial policy. While the U.S. has pressed ahead with technological investments and strengthened inbound investment screening parameters, the question remains whether allies would come aboard. Recently, allies (namely the Dutch) have expressed concern about aligning export controls; however, the recent UK order and a similar German action blocking a Chinese acquisition of a German semiconductor company may indicate an increased appetite for the heightened scrutiny of the inbound investment prong of the U.S. effort.


Alabama Man Indicted for Violating U.S. Sanctions Against Iran (DOJ Action)

Those involved. Ray Hunt

Charges and penalties. Unlawful Export of U.S.-Origin Goods to Iran (maximum of 20 years in prison and up to a $1 million fine); Conspiracy (maximum of five years in prison); Smuggling Goods from the United States (maximum of 10 years); Submitting False or Misleading Export Information (maximum of 10 years).

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