The Obama Administration is weighing the implementation of economic sanctions on Chinese companies and individuals linked to theft of trade secrets. This comes as the Administration prepares for China’s leader to make his first state visit to the U.S. in September.
The sanctions would follow from Executive Order 13694 issued in April 2015 that allowed for the “blocking of property of certain persons engaging” in commercial cyber espionage. There is already an active case involving Chinese computer scientists with an indictment announced for economic espionage against two U.S. companies. Avago Technologies and Skyworks Solutions Inc. are U.S. companies engaged in development and marketing of semiconductor technology used in mobile devices.
The case focuses on two Chinese engineers that obtained their doctorates at the University of Southern California. After graduation, they took jobs in the U.S. with one working from Avago and the other for Skyworks. They then emailed company documents to each other that contained trade secrets . The two and their coconspirators at Tianjin University and various other entities in China developed a plan to exploit the thin bulk film acoustic resonator (FBAR) technology used in cell phones that they worked on in college and at the two companies using a Chinese business they established.
Announcing new indictments or trade sanctions against large Chinese companies would be a markedly different step than the indictment of low level researchers.
A more troubling report links the efforts of cybercriminals to foreign espionage agencies. As discussed in my July 30th 2015 blog, it is the linking of different data sets that poses a greater risk. Russia and China are reportedly cross-indexing material from the OPM data breech of security clearance information with hacked medical and airline travel data to identify U.S. espionage activities. The use of cybercriminals provides an element of deniability to foreign governments and limits the options for retaliation by Western governments. There is evidence of use of “patriotic hackers” in both Russia and China.The international environment for cyber law, intelligence activities, and cyber conflict remains active and ill-defined. It will be interesting to watch these events unfold.
China and Russia are cross-indexing hacked data to target U.S. spies, officials say. (n.d.). Los Angeles Times. Retrieved from http://www.latimes.com/nation/la-na-cyber-spy-20150831-story.html
Executive Order — “Blocking the Property of Certain Persons Engaging in Significant Malicious Cyber-Enabled Activities.” (n.d.). Retrieved August 31, 2015, from https://www.whitehouse.gov/the-press-office/2015/04/01/executive-order-blocking-property-certain-persons-engaging-significant-m
Nakashima, E. (2015, May 19). U.S. indicts 6 Chinese citizens on charges of stealing trade secrets. The Washington Post. Retrieved from http://www.washingtonpost.com/world/national-security/us-indicts-6-chinese-on-charges-of-stealing-trade-secrets/2015/05/19/f11fd35e-fdd8-11e4-805c-c3f407e5a9e9_story.html
Nakashima, E. (2015, August 30). U.S. developing sanctions against China over cyberthefts. The Washington Post. Retrieved from https://www.washingtonpost.com/world/national-security/administration-developing-sanctions-against-china-over-cyberespionage/2015/08/30/9b2910aa-480b-11e5-8ab4-c73967a143d3_story.html
Participants in Conflict – Cyber Warriors, Patriotic Hackers and the Laws of War. (n.d.). Retrieved August 31, 2015, from http://www.academia.edu/4086708/Participants_in_Conflict_Cyber_Warriors_Patriotic_Hackers_and_the_Laws_of_War