Take time to use secure communications equipment However, the threat posed by terrorismboth international terrorism (IT) and domestic violent extremismhas evolved significantly since 9/11. Spies from 20 foreign intelligence agencies, including Nato allies such as France and Germany, are attempting to steal Britain's most sensitive secrets. I will focus my remarks on two aspects of Chinas unconventional espionage threat. 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. In addition to these Executive Branch actions, companies and Congress have played an important role in Americas response. Email Email. Enjoying this article? The third pillar of our approach is based on strong relationships with the private sector. $500,000 fine, and/or not more than 15 years in Federal prison Members of the Committee may have seen recent press reports about marketing firms and hedge funds buying cell phone location data showing the near-real time locations of tens of millions of Americans going about their daily routines. 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. Nonchalantly ask questions emailStay Connected Counterintelligence Awarness Briefing - United States Naval Academy Don't miss the crucial news and insights you need to make informed legal decisions. The French engaged in economic espionage throughout the 1980s. 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. Figure 6: Espionage Tradecraft Techniques by Specific PRC Entities. This would let China determine exactly where government officials and corporate executives work, where they spend the night, what doctors they visit, and their travels, among other informationall of which would provide valuable information to Chinese spies and companies. 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. Taking classified material home, illegal downloads, unreported contact with foreign nationals. These techniques were used approximately one-third of the time. The Trump administration has also begun to deploy targeted trade measures against Chinese beneficiaries of IP theft. collecting intelligence for a terrorist organization Despite the statutes broad language, the DOJ has faced significant hurdles in pursuing 951 prosecutions outside the traditional espionage context, and particularly where the alleged foreign agents activity involves ostensibly legitimate international business dealings. They seek to hold our critical infrastructure at risk, to harm our economy and to constrain our free speech. Revelations of broad-ranging Russian efforts to influence the 2016 presidential election, which resulted in criminal charges against multiple Russian intelligence officers brought by special counsel Robert Mueller, focused attention on criminal laws designed to prohibit the activities of foreign agents in the United States. Congress has also played an important role. 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. But this is not just an election-cycle threat. As part of this process, the FBI provides input and analysis to the National Intelligence Council within eight days of a CFIUS filing and a risk assessment to the Department of Justice within 30 days of a CFIUS filing. When expanded it provides a list of search options that will switch the search inputs to match the current selection. In the developing phase the foreign intelligence officer attempts to establish a close relationship with the target. 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. 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. This has allowed U.S. companies such as Micron Technologies to sue Chinese companies in federal court for the Chinese companies theft of U.S. IP. The State Department has recently pressed U.S. allies to similarly restrict the use of high-risk Chinese-made network equipment in their national telecommunications networks. Thank you again for the opportunity to testify today and I look forward to your questions. Copyright 2023 ALM Global, LLC. Your article was successfully shared with the contacts you provided. 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. Of course, China is neither the first nor the only foreign government to use its intelligence services to promote commercial interests. , Statement Before the House Homeland Security Committee. Figure 3: Distribution of Chinese Espionage Cases in the United States. To combat the threat at home, the FBI established the Domestic Terrorism-Hate Crimes Fusion Cell in spring 2019. For most daily Internet uses, the hidden world of international cyber espionage may seem too distant to be of any real importance. Failure to report may result in Judicial and/or Administrative Action In addition to FTOs, domestic violent extremists collectively pose a steady threat of violence and economic harm to the United States. 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). Evoke or draw out (a response, answer, or fact) from someone in reaction to ones own actions or questions. Chinese economic espionage, on the other hand, is an unconventional threat and requires an unconventional response. 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. Lastly, Chinas espionage activities continue unabated despite a large number of arrests, public exposure, and most recently, U.S. trade sanctions. That said, I recommend that Congress carefully consider hacking back proposals that would enable U.S. companies to take a broader range of active measures to defend themselves against cyber espionage and other cyber attacks. The Trump administration has expanded U.S. government efforts to impose costs on China over its economic espionage. Twenty years ago, I testified before a U.S. congressional committee on Chinas espionage operations in the United States. China is pursuing a whole-of-society approach to its technological capabilities that includes purchasing innovative companies through overseas investments, requiring western companies to transfer cutting edge technologies to China as a condition of market access, providing vast state resources to finance domestic technological development, and financing training for top Chinese students and researchers overseas and paying a hefty premium to attract talent back to China. Introduction 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. Other Chinese government elements that collect intelligence (information) include the PLA Political Department Liaison Office (targeted against Taiwan), United Front Work Department, and the Ministry of Industry and Information Technology. Economic espionage activities . 10. Advertisement. As a result, the FBI must remain vigilant. 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. Just as our adversaries evolve, so, too, must the FBI. It is absolutely essential to stop Chinese unconventional espionage. A joint effort would provide an integrated approach to disrupt China's espionage activities which generally fall into one (or more) of five categories: Traditional espionage (18 USC 792-799 . 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. As former Cisco CEO John Chambers once said, There are two types of companies: those who have been hacked, and those who don't yet know they have been hacked.. 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. 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. 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. DOJ used FARA to prosecute former Trump campaign chair Paul Manafort and Trump fundraiser Elliott Broidy, and in its unsuccessful prosecution of former Obama White House Counsel Gregory Craig for his alleged lobbying efforts on behalf of Ukraine stemming from his private practice legal work. 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 . Our second option allows you to build your bundle and strategically select the content that pertains to your needs. First, I will offer an assessment of aspects of the threat. When in doubt, report it, See something say something The Defense Departments Defense Advanced Research Projects Agency (DARPA), for example, last year launched a $1.5 billion, five-year initiative to support advances in chip technology. Aimed at bolstering the government's arguments, the memo highlights in detail how the FBI identifies the activities of foreigners that would potentially be considered espionage. Law.com Compass delivers you the full scope of information, from the rankings of the Am Law 200 and NLJ 500 to intricate details and comparisons of firms financials, staffing, clients, news and events. State-owned enterprises are also engaged in espionage. Note as much as possible A lock () or https:// means you've safely connected to the .gov website. In addition, there has been a debate in the community about the extent to which the apparent reduction in attacks simply represented Chinese efforts to restructure how China engages in cyber operations, rather than a genuine change in Chinese intentions. 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 PJCIS noted 'ambiguity' in relation to this term and recommended the . Access to additional free ALM publications, 1 free article* across the ALM subscription network every 30 days, Exclusive discounts on ALM events and publications. 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. No Thanks Spies might seem like a throwback to earlier days of world wars and cold wars, but they are more common than everand they are targeting our nations most valuable secrets. Victims of Chinas espionage efforts include major defense and aerospace companies, pharmaceutical firms, technology research companies, manufacturers, and universities. China needs to understand that if it tries to steal U.S. technology, it will not be able to benefit from it. The distribution of Chinese espionage cases worldwide illustrates the magnitude of CCP controlled businesses, research entities, and government organizations involved in espionage activities (see Figure 2). Beware of being overheard 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. The charges included acting as an agent of a foreign government without notifying the attorney general, a charge the Justice Department has referred to as "espionage lite," a violation of . Prepare in advance Espionage is now addressed by 3 offences in the Bill: obtaining or disclosing protected information; obtaining or disclosing trade secrets; and assisting a foreign intelligence service. 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. As Australias military ties with the U.S. deepen, the Top End becomes even more vital to Australian security. That Act prohibits the theft of trade secrets in which the perpetrator acts intending or knowing that the offense will benefit a foreign government. The FBI assesses HVEs are the greatest, most immediate terrorism threat to the homeland. 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. Similarly, CFIUS should ensure that if the Chinese government has stolen or attempted to steal U.S. technology, no Chinese company should be able to acquire a U.S. company that designs or makes the technology that China attempted to steal. International conventions, seminars, and exhibits Based on an actual case, the video illustrates how one company was targeted by foreign actors and what the FBI did to help. In approximately 60 cases I reviewed, Chinese companies or individuals were acting unilaterally for commercial benefit only. They include foreign states, criminals, "hacktivist" groups and terrorists. Getting The Talent Balance Right: From Layoffs to Laterals to Mergers, How Can Firms Staff for Success? These types of activities represent an assault against core American values in a bid to stifle legitimate and necessary debate about China. The FBI is the lead agency for exposing, preventing, and investigating intelligence activities in the U.S. Because much of today's spying is accomplished by data theft from computer networks,. Avoiding polygraph 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. An adversary uses technical countermeasures to block a previously undisclosed or classified U.S. intercept technology. Your responsibility to report. 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. Foreign power activity or knowledge which is inconsistent with the expected norm that suggests that foreign powers have knowledge of U.S. National Security. In a major coup, this past October Justice for the first time managed to extradite a suspected Chinese spy from a third country to the U.S. to face trial for his involvement in stealing U.S. trade secrets. The foreign intelligence officer begins pay the target for his efforts. 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. 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. Taking classified material home DOJ officials initially touted one such law, the Foreign Agents Registration Act (FARA), 22 U.S.C. Second, I will assess the policy responses that the U.S. has pursued to date to respond to this threat. Several high-level conclusions can be drawn from the cases representing the last 20 years of Chinese espionage operations. Almost 25 percent of cases target commercial interests. These information objectives are also tied to national defense and economic priorities. Advocating violence for terrorist organization Individual U.S. government agencies understand that increasing investment is the most important element to maintaining Americas technological edge. The PLA was involved in 61 such cases. Customer Service| 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. U.S. Trade Representative Lighthizer and President Trump need to demand major, systematic changes in a range of Chinese trade abuses before relenting on the tariffs and other measures the U.S. has imposed. Asia, Pacific The governing Chinese Communist Party (CCP) uses government, quasi-government, academic, and commercial entities as mechanisms to conduct all forms f espionage abroad. The statistics show Chinese private companies adopt an aggressive posture in conducting economic espionage activities, resulting in 60 cases prosecuted just in the United States. 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 addition, whether located at home or abroad, many cyber actors are obfuscating their identities and obscuring their activity by using combinations of leased and compromised infrastructure in domestic and foreign jurisdictions. These can number in the thousands and reflect the organizations knowledge gaps. A lock () or https:// means you've safely connected to the .gov website. Acts of espionage and foreign interference can put Canada at a disadvantage, enabling foreign countries and organizations to further their own strategic interests, at Canada's expense. Amid great power competition, life in the China-Russia borderlands reveals the paradoxes underpinning the Beijing-Moscow friendship. The Director of National Intelligence report, Foreign Economic Espionage in Cyberspace (2018) identifies key industries and technologies that are frequent targets of foreign espionage. Traditional espionage, often characterized by career foreign intelligence officers acting as diplomats or ordinary citizens, and asymmetric espionage, typically carried out by students,. Sixty-three people were killed and thousands injured. It can involve the analysis of diplomatic reports, publications, statistics, and broadcasts, as well as spying, a clandestine activity carried out by an individual or individuals working under secret identity to gather classified information on behalf of another entity or nation. 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. In nearly 25 percent of cases, individuals employed encryption for communications and/or hosted meetings in China to avoid detection by U.S. law enforcement. I'd the target takes the bait, the foreign intelligence officer recruits the target to move into a more clandestine relationship. 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. 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. Attempting to gain access, without need-to-know By Barry Black and Jonathan Robert Nelson, Shearman and Hogan Lovells Call Off Merger Talks, Early Reports: 2023 Am Law 200 Financials, Beyond Excess Capacity, Pooled Services and Automation Expedite Staff Layoffs, Dozens of Law Firms Grew Their Equity Partner Tier, Even as Profits and Demand Plummeted. 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. Many foreign terrorist organizations use various digital communication platforms to reach individuals they believe may be susceptible and sympathetic to violent terrorist messages. 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. 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. To most individual citizens, cyber espionage may not seem to influence their lives very much, but its costs on a nation-state are significant. Only a tenth of Russian spy operations in Europe have been uncovered, according to the former MI6 boss Sir John Sawers, after it emerged that the two men accused of carrying out the Salisbury . We, along with our law enforcement partners, face significant challenges in identifying and disrupting HVEs. Botnets used by cyber criminals have been responsible for billions of dollars in damages over the past several years. In 2018, CCP leader and Chinese President Xi Jinping directed all SOEs to amend their bylaws to ensure the concepts of service to the CCP as well as national and economic security are placed above profit. Belgian authorities placed him in custody on arrival and put him on a plane to the United States (most likely with an FBI escort). ISIS uses traditional media platforms as well as widespread social media campaigns to propagate its ideology. A detailed look into how, why, and where Chinese spies are active in the United States. DoD Personnel should report to their CI Element, supporting MSCO or commander. Disgruntled 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. 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. Former U.S. Defense Secretary Robert Gates said in an interview that there are probably a dozen or 15 countries that steal our technology. In 2015 a South Korean company plead guilty to conspiring to steal proprietary DuPont information about Kevlar, the body armor material, and paid more than $300 million in fines and restitution. Terrorists in ungoverned spacesboth physical and virtualreadily disseminate propaganda and training materials to attract easily influenced individuals around the world to their cause.