Second, Congress should study ways to expand prohibitions on the import into the U.S. of items made with stolen U.S. IP, and the Trump Administration should work with allies to keep such products out of foreign markets. Echoing other terrorist groups, ISIS has advocated for lone offender attacks in Western countries. Peter Harrell. by a rival foreign government. A lock () or https:// means you've safely connected to the .gov website. International conventions, seminars, and exhibits We face threats from state-sponsored hackers, hackers for hire, organized cyber syndicates, and terrorists. U.S. companies continue to need to make major investments in hardening their defenses against cyber threats and to train employees to be vigilant against Chinese espionage. The. I will also briefly touch on Chinas espionage tools with respect to U.S. universities and other non-governmental organizations here in the United States and in allied nations. The activity highlighted includes a group we track as Threat Activity Group 16 (TAG-16), which has compromised several high-profile military and government organizations across Southeast Asia throughout 2021 using custom malware families such as FunnyDream and Chinoxy. The U.S. government has also worked to sharply limit the deployment of Chinese technology and equipment here in the U.S. that China could potentially use to facilitate its unconventional espionage in the years ahead. We will continue working to identify individuals who seek to join the ranks of foreign fighters traveling in support of ISIS, those foreign fighters who may attempt to return to the United States, and HVEs who may aspire to attack the United States from within. Taking classified material home Defense, China But recent FBI cases have shown that no industry, large or small, is immune to the threat. Lastly, Chinas espionage activities continue unabated despite a large number of arrests, public exposure, and most recently, U.S. trade sanctions. When it comes to economic espionage, it is important to keep in mind that espionage is but one element in a broader Chinese strategy to modernize its economy and to promote China as the world leader in a range of technologies that will be critical to both economic and military power in the years ahead. With this subscription you will receive unlimited access to high quality, online, on-demand premium content from well-respected faculty in the legal industry. 20 Espionage falls Law Offices of Gary Martin Hays & Associates But if China proves willing to make systemic changes, the administration should be willing to relax the trade remedies the U.S. has imposed, rather than locking the U.S. into an economic cold war with Beijing. Over four years after the project was announced, updates remain scarce on China's first nuclear icebreaker. Any individual or spy ring (a cooperating group of spies), in the service of a government, company, criminal organization, or independent operation, can commit espionage. On the military side, the Peoples Liberation Army (PLA) General Staff Headquarters, Second Department is responsible for collecting military information, including related foreign technology. It is probably not a coincidence that FBI also arrested Mr. Chaoqun Ji, a PRC national in Chicago, on espionage related charges. The act of securing information of a military or political nature that a competing nation holds secret. Zach Cooper at AEI published a report on Chinas cyber strategy this past fall that compiled dozens of examples of the kinds of information China tries to steal. The FBI uses all lawful investigative techniques and methods to combat these terrorist threats to the United States. The Many Benefits of Reviewing and Updating Bylaws, Not So Fast: The Rights of Victims in Corporate Deferred Prosecutions, Defense Witness Immunity: Time for Supreme Court To Weigh In, Law.com Editors and Analysts Offer Top Trends to Watch for 2023. Share on Twitter Twitter When divided into the aforementioned categories (Espionage, Economic Espionage, ITAR, EAR, Covert Action) the 274 espionage cases show the percentages of operations as follows (Figure 1.). Recent prosecutions, however, have relied on 951. The United States charged the group with stealing airline engine technology from French and U.S. companies. 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. I would add that U.S. universities should also increase the scrutiny of their collaborative research projects with Chinese institutions and researchers to make sure that U.S. institutions are not inadvertently facilitating the transfer of proprietary and/or sensitive technology and expertise to China, while continuing to engage in legitimate and positive research collaborations. Last month, under former Attorney General Jeff Sessions, the Department of Justice expanded on several years of increasing prosecutorial efforts by launching an important new initiative to combat Chinese economic espionage, which Assistant Attorney General Demers is leading. Prepare in advance Share sensitive information only on official, secure websites. Analysis reveals several other interesting data points on the application of tradecraft. 611 et seq., which makes it illegal to act as an agent of a foreign principal by engaging in political activities in the United States without prior registration. Foreign intelligence services not only seek our nations state and military secrets, but they also target commercial trade secrets, research and development, and intellectual property, as well as insider information from the federal government, U.S. corporations, and American universities. Second, I will assess the policy responses that the U.S. has pursued to date to respond to this threat. 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. 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. No Thanks The foreign intelligence threat to the United States is expanding, becoming more complex and less predictable. frequent questionable foreign travel More deaths were caused by domestic violent extremists than international terrorists in recent years. Thank you for the opportunity to appear before you today to discuss the current threats to the United States homeland. These information objectives include systems, designs, components, radiation hardened chips, integrated circuits, software, manuals, precision optics, thermal imaging systems, production techniques, etc. The world of espionage is facing tremendous technological, political, legal, social, and commercial changes. It is seen by many who enter messaging apps and participate in social networks. Rachel Ziemba. The activities include assistance with specifications, forecasting, financing, procurement, quality assurance, order management, delivery, inventory management, distribution, human resources, information systems and reporting to improve the design and performance of country FP/RH supply chains (whether stand-alone or integrated) that manage and . However, no group has been as successful at drawing people into its perverse ideology as ISIS, which has proven dangerously competent at employing such tools. China has aggressively targeted technologies central to its Made in China 2025 industrial strategy, a fact that should come as little surprise given the importance China attaches to the strategy. Belgian authorities placed him in custody on arrival and put him on a plane to the United States (most likely with an FBI escort). The MSS was formed in June 1983 by combining the espionage, counterintelligence, and security functions of the Ministry of Public Security and the Investigations Department of the Chinese Communist Party Central Committee. 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. First, espionage is a segment of the larger intelligence cycle, which in turn describes the sets of activities designed to produce the information necessary for policymakers' decision-making. Along with our domestic and foreign partners, we are collecting and analyzing intelligence concerning the ongoing threat posed by foreign terrorist organizations and homegrown violent extremists. Together, they make up 54 percent of cases. These elements of tradecraft included specially designed smartphone software for secure covert communications (U.S. vs. Kevin Mallory); third country meetings, or use of third parties (cutouts) in the United States for communicating information between the in-country handler and recruited asset, or the in-country handler and Chinese intelligence services. Detailed analysis of these cases provides ample evidence that China is conducting espionage, as well who is responsible, their information objectives, gaps in their knowledge, and operational tradecraft techniques. 2023 Center for a New American Security (en-US). departments and their authorities in a long-term, whole-of-government effort to raise the costs of bad behavior and advance the Administration's national security strategy. No tradecraft, with parties using open communications and true names; Use of false names and/or third parties to transmit information and ship materials; Public and commercial encryption, hosting meetings in China to avoid detection; Tailor made devices or techniques, use of third countries, use of in-country cutouts to transmit information. The minimal application of tradecraft is expected, as these cases typically do not involve professional intelligence operatives (either case officers or agents). 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. Never answer questions you feel uncomfortable Almost 25 percent of cases target commercial interests. Economic Espionage and Cybersecurity Espionage comes in different forms. The government must also provide a description of the information sought and the places or facilities that will be searched. Illegal downloads. The person may. The goals of the FBIs counterintelligence work are to: Economic espionage costs the American economy hundreds of billions of dollars per year and puts our national security at risk. Figure 1: Categories of Chinese Espionage. Taking classified material home, illegal downloads, unreported contact with foreign nationals. 4 Impact of Cyber Espionage. This wide variance in professional tradecraft likely indicates MSS suffers from lack of standardized training, security awareness, operational oversight, and case management. This week Emily Kilcrease, director of the Energy, Economics, and Security program at CNAS, joins The Asia Chessboard podcast from CSIS for a wide ranging discussion on the i By License our industry-leading legal content to extend your thought leadership and build your brand. Even putting aside general issues of individual privacy, from an espionage perspective this kind of data can be a gold-mine, especially when combined with other data that the Chinese have access to. Fourth, Congress should consider amendments to the Foreign Agents Registration Act (FARA) or other legislation to require better disclosure about Chinese operations in the United States. : the practice of spying or using spies to obtain information about the plans and activities especially of a foreign government or a competing company industrial espionage Synonyms spying See all Synonyms & Antonyms in Thesaurus Example Sentences The views in this article are the authors own and do not reflect the views of the U.S. government. Do not probe for information 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. I left the Members with what I thought was an ominous warning: Do something about this now or youll be calling me back in 20 years screaming: My God, how did this happen? Well, they never called me back, but if recent FBI arrests are any indication, the problem has gotten worse a lot worse. The problem is that these recent indictments and arrests are only two of hundreds, if not thousands of cases. Dynamically explore and compare data on law firms, companies, individual lawyers, and industry trends. 13757 (2016) that authorize the Treasury Department to impose sanctions on entities that engage in various forms of cyber hacking and on companies that steal trade secrets or other high-value IP via cyber-enabled means, or which benefit from such stolen IP. U.S. Federal law enforcement office Broadly speaking, the government response can be divided into three parts: encouraging better defense; prosecuting spies; and increasing costs in an effort to punish and deter unconventional spying. Similarly, SOEs are aggressive in conducting or supporting espionage (72 acts total), stealing primarily advanced military technology. Espionage threat from the Chinese government: "We believe that there's no other country than China that poses the most severe intelligence threat to America. The IT threat to the U.S. has expanded from sophisticated, externally directed FTO plots to include individual attacks carried out by HVEs who are inspired by designated terrorist organizations. All Rights Reserved. But China is by far the most active practitioner of economic espionage today. If this is in fact the case then MSS performance is not likely to improve anytime soon. As members of the Senate know, over the summer, Congress enacted the Foreign Investment Risk Review Modernization Act (FIRRMA), which overhauled the CFIUS review process for foreign investments in the United States. Emily Kilcrease & Michael Frazer. Fines In addition to FTOs, domestic violent extremists collectively pose a steady threat of violence and economic harm to the United States. An adversary conducts activities with precision that indicates prior knowledge. For example, U.S. prosecutors have accused Chinese hackers of stealing cost and pricing information from a U.S. solar company, which was probably intended to help Chinese competitors develop their own pricing strategy. Provide non-descript answers In many respects, the goals of this kind of espionage are similar to economic espionageto capture technological advances that could prove valuable to Chinese firms and potentially to the Chinese military. View All Articles & Multimedia. Growing Mineola firm with national practice seeks associate (with 3-6 years experience) to handle complex general liability matters.Competit CASH KRUGLER & FREDERICKS LLC is Celebrating Our 20th Anniversary & Newest Partners! Removing markings. Activities, behaviors, or circumstances that "may be indicative" of potential espionage activities by an individual who may have volunteered or Ben recruited by a foreign entity as a writing espionage agent. A number of cyber security firms reported a drop in suspected China-linked attacks in the year following the agreement, and in late 2016 the CEO of the CrowdStrike cybersecurity firm called the change in Chinas behavior the biggest success weve had in this arena in 30 years. However, Justice Department indictments and U.S. government reports indicate that there has been a substantial uptick in Chinese hacking over the past year, and so it remains unclear how much the agreement has or will affect Chinese behavior over the long-term. The target is now hooked. For example, China and Chinese companies have repeatedly paid off corporate insiders at U.S. and western companies to simply walk out the door with high-value trade secrets. American policymakers should continue to distinguish between Chinas economic espionage and more traditional spying targeting U.S. government agencies, defense contractors, and other parts of the national security establishment. Cyber criminals often operate through online forums, selling illicit goods and services, including tools that lower the barrier to entry for aspiring criminals and that can be used to facilitate malicious cyber activity. 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. U.S. Embassy Journalists, military veterans, and judicial figures are being targeted by foreign espionage agencies at "unprecedented" levels, with the country's intelligence chief revealing a "hive of spies . traditional espionage activity includes foreign governmentbuddy foster now. This button displays the currently selected search type. $500,000 fine, and/or not more than 15 years in Federal prison Thank you again for the opportunity to testify today and I look forward to your questions. Unexplained absences I'd the target takes the bait, the foreign intelligence officer recruits the target to move into a more clandestine relationship. According to the New York Times, Congress received an intelligence report last month that underscored at . Sri Lankas default highlights the dangers of relying on international sovereign bonds with high interest rates to fund development. Trust your instincts I urge the government to continue its existing lines of effort, including continuing to ensure that U.S. telecommunications networks are robustly defended against Chinese unconventional espionage and to continue aggressively prosecuting Chinas espionage efforts. 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 . Do not use personal commercial computers or cell phones for sensitive or classified matters.. especially at a foreign establishment. A 2018 National Counterintelligence and Security Center (NCSC) report on foreign economic espionage in cyberspace stated that in addition to China, Russia and Iran were engaging in significant cyber-enabled economic espionage activities. We remain concerned that groups such as the Islamic State of Iraq and ash-Sham (ISIS) and al Qaeda have the intent to carry out large-scale attacks in the U.S. Chinese economic espionage, on the other hand, is an unconventional threat and requires an unconventional response. High-level findings are as follows: One cannot simply look at a single or even several espionage cases and hope to understand if, and how, a nation state is conducting espionage. DHS is also investing in research into technologies and public-private partnerships that may be able to improve cybersecurity practices and in education and outreach programs designed to improve corporate cybersecurity practices. One might expect poor tradecraft from nonprofessional intelligence entities such as individuals, companies, and SOEs. CI-21 proposes significant changes in the way the United States government approaches, and organizes itself to meet, the threat of foreign espionage and intelligence gathering. 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. 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.