In recent years a number of members of Congress have introduced legislation that would amend the CFAA to authorize hacking back by victim companies under certain circumstances. 19 This cycle generally involves five steps: tasking, collection, processing and evaluating, analysis and production, and feedback. Figure 1: Categories of Chinese Espionage. We, along with our law enforcement partners, face significant challenges in identifying and disrupting HVEs. We must seek out new technologies and solutions for the problems that exist today as well as those that are on the horizon. Your responsibility to report. Anything that doesn't fit the pattern could be an indicator of espionage Botnets used by cyber criminals have been responsible for billions of dollars in damages over the past several years. Each of these technologies is identified as apriority requirementin Chinas State Council2015 strategic plan Made in China 2025.. Taking classified material home, illegal downloads, unreported contact with foreign nationals. 1101 riveredge rd, connellsville, pa 15425; traditional espionage activity includes foreign government. Sri Lankas default highlights the dangers of relying on international sovereign bonds with high interest rates to fund development. In addition to beaming out its perspectives via Chinese state media, Beijing is aspiring to control both the structure and norms of global information networks. Does anyone need to know? Preventing terrorist attacks remains the FBIs top priority. 8. Al Qaeda maintains its desire for large-scale, spectacular attacks. 951 to pursue conduct outside the context of traditional espionage. The minimal application of tradecraft is expected, as these cases typically do not involve professional intelligence operatives (either case officers or agents). Trust your instincts Espionage makes it a crime to deal with information on behalf of, or to communicate to, a foreign principal (such as a foreign government or a person acting on their behalf). Second, we are focused on information and intelligence-sharing. The most persistent threats to the nation and to U.S. interests abroad are homegrown violent extremists (HVEs), domestic violent extremists, and foreign terrorist organizations (FTOs). But universities do need to take appropriate precautions to ensure that China is not able to use academic collaboration to steal U.S. intellectual property or engage in other activities that might harm U.S. national security. Store information in Secure Facilites While the U.S. government must continue hardening its defenses against all espionage, Chinas spying on the U.S. government fits within a long practice of government spycraft and should be addressed with traditional types of tools. They include foreign states, criminals, "hacktivist" groups and terrorists. These types of activities represent an assault against core American values in a bid to stifle legitimate and necessary debate about China. The goal of cyber espionage, which may also be referred to as cyber spying, is to provide the attacker with information that gives them advantages over competing companies or governments. In these cases no (23 cases) or minimal tradecraft (21 cases) was employed. Freeway overpasses shuddered and collapsed, swallowing cars like a sandpit. Based on an actual case, the video illustrates how one company was targeted by foreign actors and what the FBI did to help. Unusual work hours There is a near equal distribution of espionage activities between the four major organizational clusters. Solicitation and marketing of services These foreign competitors deliberately target economic intelligence in advanced technologies and successful U.S. industries. These malign activities can include assassinations, kidnappings and disinformation operations, alongside traditional espionage activities, but with far more aggressive use of proxies: Think of . Illegal downloads. In collaboration with the National Counterintelligence and Security Center, the FBI released a short film to educate anyone with a trade secret about how they can protect it. An analysis ofoperational activities reveals a wide range of tradecraft practices (see Figure 5): As illustrated, the most frequently employed elements of tradecraft include using false names or documents to ship information or technology. Some U.S. companies have also succeeded in obtaining court orders in other countries to prohibit Chinese companies from selling products based on stolen U.S. IP in those markets. Similarly, much of the responsibility for responding to Chinese efforts to infiltrate U.S. academic institutions will fall on those institutions themselves. 2 Commencement. Most widely reported these days are attempts by adversarieshoping to reach a wide swath of Americans covertly from outside the United Statesto use false personas and fabricated stories on social media platforms to discredit U.S. individuals and institutions. With Such Low Win Rates, Should Law Firms Respond to So Many RFPs? The nation faces a continuing threat, both traditional and asymmetric, from hostile foreign intelligence agencies. But the reality is that China also engages in economic espionage using a wide range more traditional of techniques, many of which have been publicly identified over the past several years by U.S. corporate disclosures, researchers, published U.S. government reports, and Department of Justice prosecutions of suspected Chinese spies. espionage is described as: the act of obtaining transmitting, communication or receiving information about the national defense with the intent, or reason to believe, that the information may be used to the injury of the U.S. or to the advantage of any foreign nation Examples of PEI include, Unexplained affluence, concealing foreign travel, unusual work hours, avoiding polygraph It is time for Pakistans political and military establishment to wake up and reconcile with the fact that they cant negotiate their way to peace. Fifth, I would encourage Congress to carefully study proposals to enable U.S. companies who are victims of Chinese economic espionage to hack back. There are significant concerns about hacking back proposals but I believe the concept merits careful study. There is also a national construct in place (however redundant) to ensure intelligence information objectives are satisfied by collecting foreign information and technology. 3488, enacted October 11, 1996 deals with industrial espionage (e.g., the theft or misappropriation of a trade secret and the National Information Infrastructure Protection Act) and four other areas of action that Congress deemed appropriate and the United States Sentencing Commission reports regarding encryption or . A number of countries have mounted aggressive economic espionage campaigns here that vacuum up advanced United States Our nation continues to face a multitude of serious and evolving threats ranging from homegrown violent extremists (HVEs) to cyber criminals to hostile foreign intelligence services and operatives. But China is investing billions of dollars in its own technological prowess and can draw on the expertise of millions of Chinese engineers and scientists who have studied at top universities globally. I'd the target takes the bait, the foreign intelligence officer recruits the target to move into a more clandestine relationship. Fortunately, efforts here in Congress, including by Chairman Grassley and other members of this Committee, have drawn public attention to this issue, and Assistant Attorney General Demers and the Department of Justice have significantly expanded FARA enforcement. As I said earlier, I commend the work of the Department of Justice, the FBI, the Department of Homeland Security, USTR and other federal agencies to address Chinas unconventional espionage threat. Distribution of Chinese Espionage Activities in the U.S. Chinas main espionage activities against the United States are focused on the illegal export of military and dual use technology. Although the Obama administration never sanctioned any Chinese individuals or companies using these authorities, it did use the potent threat of sanctions, as well as criminal prosecutions and significant high-level diplomatic engagement, to convince China to enter into a 2015 agreement in which Chinese President Xi agreed that China would not knowingly support cyber-enabled theft intellectual property for commercial gain. Site Map, Advertise| These criminals have also increased the sophistication of their schemes, which are more difficult to detect and more resilient to disruption than ever. Economic Espionage and Cybersecurity Espionage comes in different forms. Finally, the investments we make at home to maintain Americas technological edge are ultimately going to be more important than the steps we take to stop Chinas theft of American IP. Law.com Compass includes access to our exclusive industry reports, combining the unmatched expertise of our analyst team with ALMs deep bench of proprietary information to provide insights that cant be found anywhere else. Copyright 2023 ALM Global, LLC. Trends may shift, but the underlying drivers for domestic violent extremismsuch as perceptions of government or law enforcement overreach, socio-political conditions, racism, anti-Semitism, Islamophobia, and reactions to legislative actionsremain constant. The person may. While it is challenging to accurately estimate the costs of such espionage, in 2017 the U.S. China IP Commission estimated that the total cost of Chinas theft of IP, which also includes more prosaic forms of IP theft like piracy and counterfeiting, costs the U.S. economy at least $225 billion annually and possibly as much as $600 billion. The first of these is espionage targeting cutting edge research and technologies being developed by U.S. universities, including technology that has U.S. military applications. I will address three issues in my testimony before you this morning. Our Compliance bundles are curated by CLE Counselors and include current legal topics and challenges within the industry. A recent report by cybersecurity firm Carbon Black found that 68 percent of surveyed cybersecurity incident response professionals reported that they were seeing cyberattacks from China and the half of all investigations focused on China and Russia. As members of this Committee know, for many years the Department of Justice expended too little energy enforcing FARA, resulting in an explosion both here in Washington and across the country of unregistered agents working on behalf of foreign governments. Former National Security Agency Director Keith Alexander has called Chinas IP theft greatest transfer of wealth in history. And as the 2018 NCSC report noted, the threat is growing due to expanded cloud-based computer networks and the internet of things (the home appliances, cars, and other things that will be connected to the internet)--which, according to the NCSC will create an incalculably larger exploitation space for cyber threat actors., Casual discussions of Chinese economic espionage often focus on high-end cyber intrusions into U.S. corporate networks. Most of Chinas espionage activities are not traditional espionage, yet they are having a profoundimpact on Americas economic wellbeing, national security, and potentially our political and governance processes. Intelligence & Espionage. While the U.S. government and defense contractors must continue to harden their defenses against Chinese espionage and the U.S. government must work aggressively to root out, expel, and prosecute Chinese spies, the framework for addressing this kind of espionage is well developed. procuring supplies for terrorist organizations Don't miss the crucial news and insights you need to make informed legal decisions. However, the threat posed by terrorismboth international terrorism (IT) and domestic violent extremismhas evolved significantly since 9/11. SOE espionage activities show a wide variance in tradecraft. In some of those cases (perhaps 20 percent), there was a clearly identifiable Chinese government or SOE as the ultimatecustomer for illegal exports or trade secrets. These individuals are FTO-inspired individuals who are in the U.S., have been radicalized primarily in the U.S., and are not receiving individualized direction from FTOs. The Economic Espionage Act (EEA)1996 Public Law 104-294, 110 Stat. Therefore, when it comes to national security, it is vital that the men and women of our national intelligence community collect reliable domestic and foreign intelligence information involving criminal, clandestine and warlike activity. A person who commits espionage is called an espionage agent or spy. The final aspects of Chinese espionage activities are their use of specific clandestine collection techniques commonly known as espionage tradecraft. Chinese government agencies, SOEs, companies and individuals employ varying levels of sophistication of espionage tradecraft. The scale and scope of China-nexus targeted intrusion activity is unlikely to contract in 2023, as cyber espionage remains a critical instrument to support the CCP's strategic and economic. The International Trade Commission (ITC) has authority under Section 337 to investigate claims that an import uses stolen U.S. IP and to exclude infringing products, and has excluded a number of Chinese products in recent years. U.S. Embassy DOJ has also faced repeated setbacks in its prosecution in the Eastern District of Virginia of Bijan Rafiekian, former business partner of Trumps National Security Advisor Michael Flynn, accused of acting as an illegal agent of the Turkish government in an effort to obtain the extradition of a Turkish dissident. When in doubt, report it, See something say something China's espionage operations on the United States have been growing stronger for years. This initiative will also work to use tools like the Foreign Agent Registration Act (FARA) to require better disclosure of Chinese activities across the United States. The intelligence officer may begin by accessing the corporate web page to identify candidates to target via emails or social engineering. Individual victims of Chinese IP theft have begun to resort to legal measures to fight back against companies that steal their trade secrets. Foreign Intelligence Threats - Traditional Activity. Rachel Ziemba. There is a wide variance in what the media, public, and U.S. legal codes define as espionage. Four U.S. statutes and administrative regulations encompass those definitions: For the purposes of this study, all the aforementioned legal definitions of criminal acts are categorized as espionage. This espionage definition considers media and common public usage, and similarities in the acts, i.e. Foreign espionage strikes at the heart of U.S. national security, impacting political, military and economic arenas. Cyber Attacks, Potential espionage indicators (PEIs) are activities by an individual who may have volunteered or been recruited by a foreign entity as a writing espionage agent. The initiative will prioritize cases of Chinese economic espionage and ensure that they are appropriately resourced. Those include going after terrorists and spies, including in cyberspace, countering foreign malign influence, enforcing our export controls and sanctions laws, and reviewing foreign investments in U.S. companies. There are 150,000 SOEs in China, 50,000 of which are owned by the central government and include aerospace and defense companies, research institutes, technology transfer organizations. Technology companies have a front-line responsibility to secure their own networks, products, and platforms. This is due, in part, to their lack of a direct connection with an FTO, an ability to rapidly mobilize, and the use of encrypted communications. In October, the U.S. passed sweeping new export controls on China. But government tools must also be an important part of the U.S. government response. Amid great power competition, life in the China-Russia borderlands reveals the paradoxes underpinning the Beijing-Moscow friendship. Nearly half of Chinas espionage efforts target U.S. military and space technologies. Chinese social groups, enterprises and public entities will have increased responsibility to combat foreign espionage under new regulations issued by the country's ministry of state security. Contact with international terrorist Subscribe These can number in the thousands and reflect the organizations knowledge gaps. The distribution pattern shows activity concentrations occurring in high-tech sectors, manufacturing hubs, and business centers. Good morning Chairman Thompson, Ranking Member Rogers, and members of the committee. When expanded it provides a list of search options that will switch the search inputs to match the current selection. Individuals used true names and open communications including emails, text messages, and phone calls. Chinese economic espionage, on the other hand, is an unconventional threat and requires an unconventional response. Edward Fishman. These diverse threats underscore the complexity and breadth of the FBIs mission: to protect the American people and uphold the Constitution of the United States. Intercepts of cell phones or wireless signals, 1. In the developing phase the foreign intelligence officer attempts to establish a close relationship with the target. Hacking back proposals would need to be carefully tailored to mitigate potential unintended consequences and to protect innocent parties, and the risks need to be carefully evaluated. The FBIs affidavit describes luring Xu to Belgium to illegally purchase General Electric commercial aviation technology.
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