US, Allies Slam China Over Cyberespionage As DOJ Indicts Hackers

Update 2:  The statements condemning China from various US allies teased in the WaPo report are starting to trickle in.

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Update: The latest batch of indictments has been handed down. The DOJ has indicted two hackers for their alleged involvement in a global hacking campaign, carried out at the behest of the Tianjin office of China's MSS. The behavior allegedly happened over two time periods, one of which began in 2006, and the other beginning in 2014. They compromised more than 40 computers belonging to the US Navy.

Here's a breakdown of the indictment, courtesy of CNBC:

  • Prosecutors accused the hackers of operating in connection with the Chinese government.
  • They are accused of stealing information from at least 45 U.S. tech companies and government agencies.
  • Agencies targeted included the Department of Energy's National Laboratory and NASA's jet propulsion lab.
  • The hackers also allegedly targeted defense industrial companies and managed service providers, as a way to gain entry to U.S. corporations and agencies through their suppliers.
  • The two defendants, Zhu Hua and Zhang Shilong, were allegedly members of a group known as "Advanced Persistent Threat 10," or "APT10." The group was also known within the cybersecurity community as "Stone Panda," "Red Apollo" and "POTASSIUM."
  • APT10 allegedly hacked into more than 40 computers connected to the U.S. Navy and stole confidential data, including "the personally identifiable information of more than 100,000 Navy personnel."
  • They're also accused of hacking three communications technology companies, three companies "involved in manufacturing advanced electronic systems," a maritime technology company, an oil and gas company, and at least 25 other technology-related companies.

Later, DHS and the State Department warned Beijing to "abide by its commitment to act responsibly in cyberspace" and said the US would "take appropriate measures to defend our interests," according to Politico.

"China stands accused of engaging in criminal activity that victimizes individuals and companies in the United States, violates our laws, and departs from international norms of responsible state behavior," Deputy Attorney General Rod Rosenstein said during a midday press conference.

"The activity alleged in this indictment violates the commitment that China made to members of the international community," Rosenstein said. "The evidence suggests that China may not intend to abide by its promises."

While whether they will ever end up in a US jail cell is an open question, there will be an Interpol warrant out for their arrest, meaning if they ever leave China, they will put themselves at risk.

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The steady drumbeat of indictments of Chinese companies, hackers and even bad actors allegedly working on behalf of China's Ministry of State Security in recent months has provoked whispers that sanctions against Beijing in retaliation for its hacking and espionage efforts - something that has become a sticking point in the US-China trade war - could be in the offing.

Now, it appears that moment has finally arrived, according to a story in the Washington Post. To wit, several western government officials reportedly told WaPo that the Trump administration and more than a dozen of its allies are expected to condemn Beijing on Thursday over the MSS's campaign to steal other countries' trade secrets and advanced technologies, as well as its efforts to compromise sensitive government and corporate computer networks.

White House

The "gesture" suggests that the rest of the world is gradually coming around to President Trump's insistence that China isn't playing fair - it's not abiding by internationally recognized norms for trade and fair play - and that its path to becoming a global super power and economic and technological leader was greased by cheating. The denunciation portends a long-awaited indictment of Chinese intelligence agents who have allegedly led a long-running campaign to infiltrate communications networks in the US and other countries (something that was foreshadowed by the US's efforts to convince its allies to abandon telecoms equipment manufactured by China's Huawei).

But more importantly, after the gesture of contempt, sanctions related to China's cyberespionage efforts are expected to be announced - a decision that will almost certainly infuriate Beijing. The process of coming together to condemn China was led by presidents and prime ministers of the countries that are taking part.

Reports emerged earlier this month that the DOJ was preparing to indict Chinese intelligence officials who are believed to be members of a hacking group known as ATP10 ("Advanced Persistent Threat 10"). As we explained at the time, ATP10 is believed to have broken into "managed service providers" in various countries in an effort to worm their way into secure corporate and government networks.

Trump is also reportedly preparing to go after China for breaking its promise to the Obama administration to refrain from further state-sponsored hacking - a promise made after the infamous infiltration of the US's Office of Personnel Management's system, which is believed to have compromised the identities of US intelligence assets.

Also known as APT10, the hacking group broke into so-called "managed service providers" in the United States, Britain, Japan, Canada, Australia, Brazil, France, Switzerland and South Korea, among other countries. The goal: to worm their way into the networks of the service providers’ clients to gain access to their intellectual property and sensitive data.

Also expected is a condemnation by Trump administration officials of China for allegedly violating a landmark 2015 pact to refrain from hacking for commercial gain. Taking part in the administration’s actions are the State and Homeland Security departments.

The gesture is part of a concerted effort by the US and its allies in Europe and Asia to push back against China's aggressive military and economic stance.

It also risks complicating trade talks between China and the US, as Beijing has warned that any further economic sanctions applied against China from the West could be a dealbreaker for any further cooperation.