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The third major line of response has been to increase costs to China over its espionage program and to take action against specific Chinese companies that engage in and/or profit from unconventional espionage. ), LTG Anthony R. "Tony" Ierardi, USA (Ret. Over the last five years, I compiled and analyzed 274 cases of Chinese espionage that have occurred since the year 2000. Chinese economic espionage, on the other hand, is an unconventional threat and requires an unconventional response. 2023 Center for a New American Security (en-US). The United States has progressively expanded the scope of sanctions and entity-based export controls on Chinese persons (i.e., individuals and entities), primaril By We take all potential threats to public and private sector systems seriously and will continue to investigate and hold accountable those who pose a threat in cyberspace. With this subscription you will receive unlimited access to high quality, online, on-demand premium content from well-respected faculty in the legal industry. Intercepts of cell phones or wireless signals, 1. The task force now brings together the FBIs expertise across the waterfrontcounterintelligence, cyber, criminal, and even counterterrorismto root out and respond to foreign influence operations. The Committee on Foreign Investment in the U.S. (CFIUS), an Executive Branch committee chaired by the Department of Treasury, was statutorily created to address potential risks to U.S. national security resulting from foreign acquisitions or mergers with U.S. companies. Sanctions need to be deployed carefully to avoid unintended consequences and, at least initially, should be used only against egregious violators. Removing markings. U.S. Embassy 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. More than 60 percent of Chinas attempts to illegally export U.S. critical technologies are targeted at military technologies or space systems. We need to keep efforts that target Chinas espionage laser-focused on the small percentage of individuals and entities engaged in illicit behavior. This is perfect for attorneys licensed in multiple jurisdictions or for attorneys that have fulfilled their CLE requirement but need to access resourceful information for their practice areas. Provide non-descript answers Join New York Law Journal now! A detailed look into how, why, and where Chinese spies are active in the United States. Any company with a proprietary product, process, or idea can be a target. Fines But China does not only steal corporate crown jewels like trade secrets: It targets a wide variety of information that can provide Chinese companies with commercial advantage. Our adversaries are continuously trying to undermine our country, whether it is election season or not. This Committee and the Congress as a whole should consider legislative reforms to expand the reach of FARA or to adopt other disclosure legislation that would ensure that Chinese activities related to universities and other non-profits are fully subject to public disclosure requirements. First, I will offer an assessment of aspects of the threat. It is absolutely essential to stop Chinese unconventional espionage. 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). In the developing phase the foreign intelligence officer attempts to establish a close relationship with the target. Asia, Pacific The division has a wide range of responsibilities. Congress passed the CFAA to prohibit hacking, but the law also prohibits hacking back in which victims of cyber espionage and other hacking take active steps to interfere with the hackers computers. In 2017 and 2018, suspected China-linked hackers have targeted U.S. firms operating in sectors including cloud computing, artificial intelligence, internet connected devices, biotechnology, energy, robotics, transportation, agricultural machinery and other agricultural technology, and high-end medical devices. Almost 25 percent of cases target commercial interests. China has also tried to hack think tanks to understand policy and think tank engagement with government officials. We must seek out new technologies and solutions for the problems that exist today as well as those that are on the horizon. Access to additional free ALM publications, 1 free article* across the ALM subscription network every 30 days, Exclusive discounts on ALM events and publications. Economic espionage, which is mainly conducted by private companies or individuals, makes up 23.5 percent of cases. Outright theft of U.S. and western intellectual property (IP) is a key piece of Chinas strategy, but it is only a piece. Any other statement in column 2 has effect according to its terms. ISIS is not the only terrorist group of concern. Historically, economic espionage has targeted defense-related and high-tech industries. However, the threat posed by terrorismboth international terrorism (IT) and domestic violent extremismhas evolved significantly since 9/11. Congress enacted the Espionage Act on June 15, 1917, two months after the U.S. entered World War I, to stifle dissent of U.S. involvement in the war. The first line of response has been to encourage companies to harden their networks against cyber intrusions and to bolster defenses against other types IP theft, such as by corporate insiders. U.S. intelligence, security, and law enforcement apparatus is just starting, 20 years later, to catch on. 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. ISIS uses traditional media platforms as well as widespread social media campaigns to propagate its ideology. With Such Low Win Rates, Should Law Firms Respond to So Many RFPs? An adversary uses technical countermeasures to block a previously undisclosed or classified U.S. intercept technology. DoD Personnel should report to their CI Element, supporting MSCO or commander. These criminals have also increased the sophistication of their schemes, which are more difficult to detect and more resilient to disruption than ever. Terminating employment The wide variance in sophistication of espionage tradecraft implies the idea of Islands of Excellence (see Figure 6) meaning China employs espionage tradecraft with varying degrees of sophistication and effectiveness. Any unprotected trade secret can be illegally stolen. The minimal application of tradecraft is expected, as these cases typically do not involve professional intelligence operatives (either case officers or agents). 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. As a recent report by the Hoover Institution and the Asia Society put it, Chinese-backed associations on American campuses can provide a ready channel or entry point for the political departments of Chinas embassy and consulates in the US to gather information and coordinate action. The attack was attributed to Russian hackers and caused an estimated $10 billion in damages. The foreign intelligence threat to the United States is expanding, becoming more complex and less predictable. This button displays the currently selected search type. In the Assessing phase the foreign intelligence officer will look for exploitable weaknesses such as: alcohol abuse, drug use, extramarital affairs, gambling or other financial problems. 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). Take the battery out of cell phones 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. Sixty-three people were killed and thousands injured. And the U.S. would need to take the Ronald Reagan line towards Soviet military commitments when it comes to Chinese concessions, Trust, but verifywith an emphasis on the verify. But we should not foreclose the possibility of cooperation. Our Team Account subscription service is for legal teams of four or more attorneys. Individual victims of Chinese IP theft have begun to resort to legal measures to fight back against companies that steal their trade secrets. The scope of the criminal activity, including evidence of involvement by a foreign government, foreign agent, or foreign instrumentality The degree of economic injury to the trade secret owner The . If Beijing sees no path to a cooperative economic relationship with Washington and instead believes that it will face mounting U.S. pressure regardless of any concessions Beijing may offer, Beijing will have little incentive to curb its efforts to steal U.S. technology. Prepare in advance Traditional espionage (18 USC 792-799): The practice of spying or using spies to obtain information about the plans and activities of a foreign government. Weak passwords Browsing international terrorist websites, Everyone is required to report all FIE threats In its recent stepped-up enforcement efforts against foreign influence in American politics, the DOJ has faced some high-profile setbacks when it has sought to use the broad reach of 18 U.S.C. What do we know about him? However, other influence operations may include targeting U.S. officials and other U.S. persons through traditional intelligence tradecraft; criminal efforts to suppress voting and provide illegal campaign financing; concealing efforts to influence U.S. government activities, cyber attacks against voting infrastructure, along with computer intrusions targeting elected officials and others; and a whole slew of other kinds of influence, like both overtly and covertly manipulating news stories, spreading disinformation, leveraging economic resources, and escalating divisive issues. China needs to understand that if it tries to steal U.S. technology, it will not be able to benefit from it. 8. In October, the U.S. passed sweeping new export controls on China. Collection methods of operation frequently used by Foreign Intelligence Entities (FIE) to collect information from DoD on the critical technology being produced within the cleared defense contractor facilities we support include, Unsolicited requests for information An official website of the United States government. The category of traditional espionage can be seen at 18 percent; but is considerably lower when Taiwan is removed as a PRC intelligence target. Several high-level conclusions can be drawn from the cases representing the last 20 years of Chinese espionage operations. 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. The FBI is working closely with partners in the Intelligence Community and in the federal government, as well as with state and local partners, to establish a common operating picture. A fine of not more than $5,000,000, Personnel who fail to report CI activities of concern as outlined in Enclosure 4 of DoD Directive 5240.06 are subject to appropriate disciplinary action under regulations, Under DoDD 5240.06 Reportable Foreign Intelligence Contacts, Activities, Indicators and Behavior; which of the following is reportable, Contact with known or suspected foreign intelligence Nearly half of Chinas espionage efforts target U.S. military and space technologies. Be assured, the FBI continues to strive to work and share information more efficiently, and to pursue a variety of lawful methods to help stay ahead of these threats. Espionage Act said the need for the Act to apply everywhere was prompted by Irvin C Scarbeck, a State Department official who was charged with yielding to blackmail threats in Poland. First order effects of China's espionage include the impact on the U.S. economy through loss of intellectual property. In late October, the U.S. Commerce Department put a Chinese semiconductor firm, Fujian Jinhua Integrated Circuit Company, on its entity list, which prohibits U.S. companies from selling Fujian Jinhua technology and products. Economic Espionage Act of 1996. Reporting threats to your Facility Security Officer or Supervisor. Take time to use secure communications equipment Over four years after the project was announced, updates remain scarce on China's first nuclear icebreaker. And this is a pervasive reality. Responding to Chinas unconventional espionage threat will require a whole-of-society approach, not just a whole-of-government approach. Chinese military sources can tell us exactly what the PLA is learning. The FBI assesses HVEs are the greatest, most immediate terrorism threat to the homeland. Women, Influence & Power in Law UK Awards honors women lawyers who have made a remarkable difference in the legal profession. Expressing an obligation to engage in violence 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. Additionally, the DSN shall instruct NOAA staff and employees to report suspicious activities involving the foreign national to the DSN who, in turn, shall report them to the servicing security office immediately. Cleared contractor facility 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. The PJCIS noted 'ambiguity' in relation to this term and recommended the . 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. Beware of being overheard The venues for prosecution show where the target company or organization was located (see Figure 3.) There have also been questions about how to limit hacking back so that a company engaged in hacking back is subject to appropriate U.S. government supervision and does not either intentionally or inadvertently escalate the situation. 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. We, along with our law enforcement partners, face significant challenges in identifying and disrupting HVEs. Edward Snowden (2013) There is some argument as to whether this is a true espionage case or not, despite the fact that U.S. authorities have charged Snowden with a criminal indictment asserting such. 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. 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. Chinas information objectives are focused in priority sectors and technologies. Lastly, Chinas espionage activities continue unabated despite a large number of arrests, public exposure, and most recently, U.S. trade sanctions. The views in this article are the authors own and do not reflect the views of the U.S. government. Many foreign terrorist organizations use various digital communication platforms to reach individuals they believe may be susceptible and sympathetic to violent terrorist messages. We face threats from state-sponsored hackers, hackers for hire, organized cyber syndicates, and terrorists. 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. 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. The bottom line is that if there is information out there that China thinks is of value, the odds are that China has or will try to steal it. Law Offices of Gary Martin Hays & Associates Figure 3: Distribution of Chinese Espionage Cases in the United States. Good morning Chairman Thompson, Ranking Member Rogers, and members of the committee. NPR's Leila Fadel talks to Rachel Ziemba of the Center for a New American Security about sanctions which have failed to dramatically weaken Russia's economy, and its ability t By Similarly, even as the U.S. increases pressure on Chinas unconventional espionage, we should make sure that we do not inadvertently shut down or prevent valuable academic study, research and development, and other activities that benefit the U.S. For example, the U.S. derives major benefits from the hundreds of thousands of highly-skilled foreigners, including from China, who come to the U.S. to study, to work, and to start businesses. No Thanks 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. Russia and China have been identified as . Unusual work hours Department of Justice indictments and private sector reports in recent years have accused Chinese hackers of breaking into the corporate networks of U.S. and western companies including defense contractors, non-profits, semiconductor firms, healthcare companies, industrial manufacturers, aerospace companies, media companies, solar companies, and electronics companies, among others. Over the last year, the FBI has met with top social media and technology companies several times, provided them with classified briefings, and shared specific threat indicators and account information, so they can better monitor their own platforms. Task force personnel work closely with other U.S. government agencies and international partners concerned about foreign influence efforts aimed at their countries, using three key pillars. In closing, I would like to offer two general thoughts. On October 30, 2018 the U.S. Department of Justice announced the indictment of 10 Chinese intelligence officers and cyber hackers from the Ministry of State Security (MSS), Chinas main civilian espionage organization. We continue to encourage information sharing, which is evidenced through our partnerships with many federal, state, local, and tribal agencies assigned to Joint Terrorism Task Forces around the country. Share on Twitter Twitter In addition to FTOs, domestic violent extremists collectively pose a steady threat of violence and economic harm to the United States. Each of these technologies is identified as apriority requirementin Chinas State Council2015 strategic plan Made in China 2025.. Advocating support for terrorist organizations This has taken several forms. 19 This cycle generally involves five steps: tasking, collection, processing and evaluating, analysis and production, and feedback. Espionage and counterespionage have been essential tools of statecraft for centuries, of course, and U.S. and Chinese intelligence agencies have been battling one another for decades. The threats posed by foreign fighters, including those recruited from the U.S., are very dynamic. Enjoying this article? Cyber espionage: Russian state-sponsored groups have been implicated in a range of cyber espionage activities against Ukraine, including stealing sensitive government and military data, intellectual property, and other confidential information. China's espionage operations on the United States have been growing stronger for years. Simultaneously, over the last year, propaganda from al Qaeda leaders seeks to inspire individuals to conduct their own attacks in the U.S. and the West. Unauthorized access to information systems. Through the Internet, terrorists anywhere overseas now have direct access to our local communities to target and recruit our citizens and spread their message faster than was imagined just a few years ago. 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. However, cases attributed to the Ministry of State Security show an astounding nine cases where case officers and recruited agents demonstrated no discernible tradecraft. Just as our adversaries evolve, so, too, must the FBI. This wide variance in professional tradecraft likely indicates MSS suffers from lack of standardized training, security awareness, operational oversight, and case management. In 2016 broad bipartisan majorities of Congress passed the Defend Trade Secrets Act, which expanded the rights of U.S. companies to sue Chinese firms and other foreign competitors that steal their IP. U.S. Federal law enforcement office In recent years we have broadly seen two types of Chinese espionage targeting U.S. colleges and universities. The definition of 'foreign principal' (proposed section 90.2) includes a 'foreign government principal' and in the Bill as introduced, the definition of 'foreign government principal' (proposed section 90.3) included a 'foreign political organisation'. 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. 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. In recent years, prolific use of social media by FTOs has greatly enhanced their ability to disseminate messages. Within the FBI, we are focused on the most dangerous malicious cyber activity: high-level intrusions by state-sponsored hackers, global organized crime syndicates, and other technically sophisticated and dangerous actors. Of course, China is neither the first nor the only foreign government to use its intelligence services to promote commercial interests. Freeway overpasses shuddered and collapsed, swallowing cars like a sandpit. Counterintelligence is defined in Executive Order 12333, as amended, is "information gathered and activities conducted to protect against espionage, other intelligence activities, sabotage, or assassinations conducted by or on behalf of foreign governments or elements thereof, foreign organizations or foreign persons, or assassinations conducted by or on behalf of foreign governments or elements thereof, foreign organizations or forgiven persons, or international terrorist activities. Copyright 2023 ALM Global, LLC. But universities risk being fertile place for this kind of espionage, given the open, international, and collaborative nature of most university research and universities legitimate interest in encouraging international collaboration. The Administration and Congress should also look for ways to make these kinds of tools multilateral, working with foreign governments to ensure that foreign countries do not import products made with stolen U.S. IP and that the U.S. does not import products made with stolen foreign IP.