On Oct. 24, 2022, the U.S. Department of Justice announced charges against two Chinese intelligence officers relating to alleged efforts to obstruct the ongoing prosecution of Huawei Technologies Co. Ltd. (Huawei) by soliciting sensitive information from U.S. law enforcement. Public filings relating to the case suggest that the scheme involved a hybrid effort in which the intelligence officers were in contact with Chinese officials and Huawei itself. In light of diplomatic tension related to the Huawei prosecution, it is hardly surprising to learn of a Chinese foreign intelligence operation intended to disrupt the case. And while China's target was the U.S. government in this instance, the defendants' alleged conduct and methodologies illustrate security risks and compliance challenges faced by private U.S. entities and their personnel related to insider threats and corporate espionage.

The Huawei Prosecution

Huawei is a global telecommunications company, based in Guangdong, China, that employs almost 200,000 people in approximately 170 countries. In December 2018, Canadian authorities provisionally arrested Huawei CFO Wanzhou Meng at the United States' request. In January 2019, DOJ unsealed charges against Meng, Huawei, and certain of Huawei's affiliates. DOJ alleged that the defendants committed a host of federal crimes in connection with a scheme to cause international banks to process transactions in violation of U.S. sanctions against Iran by concealing the operations of an alleged Iranian affiliate.

The charges escalated existing tension between the United States and China over international trade and Huawei in particular. Following Meng's arrest in Canada, China blocked certain Canadian exports and arrested two Canadian citizens based on allegations of espionage. In September 2021, Meng entered into a deferred prosecution agreement with DOJ in which she admitted to several of DOJ's central factual allegations about the case. Meng entered into the agreement with U.S. prosecutors from Canada, and the prosecutors permitted her to return to China during the deferment period. Within days of the agreement, China released the detained Canadian citizens.