US sanctions Russia for cyber-attacks

US sanctions Russia for cyber-attacks
The US Department of the Treasury’s Office of Foreign Assets Control (OFAC) has announced sanctions against eight Russian entities over “material and technological..

The US Department of the Treasury’s Office of Foreign Assets Control (OFAC) has announced sanctions against eight Russian entities over “material and technological support to Russia’s Federal Security Service (FSB).”

The FSB was sanctioned by the US Treasury earlier this year for alleged cyber-attacks on behalf of the Kremlin.

Background

Cyber terrorism is broadly defined as the use of cyber infrastructure to launch major attacks on other infrastructures with political or malicious intent. Cyber-crime is a growing security threat for nations across the world. In recent years, Western nations have accused Russia of conducting covert operations to influence democratic outcomes. According to US intelligence agencies, Kremlin interfered in the 2016 presidential elections. Russia is said to have hacked the servers of the Democratic National Committee (DNC) and the personal email account of John Podesta, the chairman of Hillary Clinton’s campaign. The data obtained from these hacks was allegedly forwarded to Wikileaks.

The UK government has also accused Russia of hacking elections and Russia has been implicated in the alleged hacks that took place during the French presidential elections. US and UK have also accused Kremlin of orchestrating the “NotPetya” cyber-attacks that took place last year. The virus was a malware directed primarily at Ukraine, hitting financial and government sectors as well as organisations that had strong ties in the nation. In 2017, the US Department of Homeland Security ordered all government agencies and departments to stop using Kaspersky, a security software developed by the Russian Kaspersky Lab.

Sanctions on Russia

Major sanctions were imposed on Russia by the west after Russian military intervention in Ukraine in 2014. Since 2014, the US has imposed a number of sanctions on Russian entities for their involvement in Ukraine, Syria, and interference in the 2016 US Presidential elections. Washington claims that these sanctions would ensure that the entities benefiting from destabilizing activities face consequences. In 2016, former President Barack Obama also sanctioned the FSB over alleged hacking of Democratic political organisations.

On August 2, 2017, the President signed into law the “Countering America’s Adversaries Through Sanctions Act (CAATSA).” The law limited the amount of money Americans could invest in Russian energy projects and made it more difficult for US companies to do business with Russia. Under this act, any country trading with Russia’s defense and intelligence sectors could also face sanctions.

Earlier this year, the Trump administration provided the Treasury Department with a list of about 210 Russian businessmen and oligarchs deemed close enough to Russian President Vladimir Putin to be targets for new sanctions. In April, the US imposed measures on at 17 senior Russian government officials, the state-owned Russian weapons trading company Rosoboronexport, and Russian Financial Corporation Bank.

Analysis

The US Treasury Department has announced sanctions against five Russian firms and three individuals under Section 224 of the Countering America’s Adversaries Through Sanctions Act (CAATSA), and Executive Order (E.O.) 13694, “Blocking the Property of Certain Persons Engaging in Significant Malicious Cyber-Enabled Activities.”

Entities targeted included Digital Security and its subsidiaries ERPScan and Embedi, Kvant Scientific Research Institute, and Divetechnoservices, for extensive ties with the FSB (Federal Security Service). Embedi and ERPCSAN also have offices in Israel. Aleksandr Tribun, general director of Tribun, Oleg Chirikov, Program Manager at Divetechnoservices, and Divetechnoservices owner Vladimir Kaganskiy are the individuals under sanction.

Divetechnoservices is a diving company that specialises in underwater equipment. It was allegedly commissioned by the FSB for a submersible craft valued at $1.5 million. The FSB has been accused of tracking Western undersea communication cables which “carry the bulk of the world’s telecommunications data”, with malign intent.

"The United States is engaged in an ongoing effort to counter malicious actors working at the behest of the Russian Federation and its military and intelligence units to increase Russia’s offensive cyber capabilities. The entities designated today have directly contributed to improving Russia's cyber and underwater capabilities through their work with the FSB and therefore jeopardise the safety and security of the United States and our allies," Treasury Secretary Steven Mnuchin said in an official statement. “The United States is committed to aggressively targeting any entity or individual working at the direction of the FSB whose work threatens the United States.”

The US Treasury cited the 2017 NotPetya attack, attacks on the US energy grid, and global attacks on network infrastructure devices including routers, as examples of “Russia’s malign and destabilizing cyber activities.”

Counterpoint

Franz Klintsevich, member of the Defense Committee of Russia’s Federation Council (upper house), said that Moscow would take retaliatory measures. President Vladimir Putin recently signed a countersanctions law. Read more on this law here. “Of course, Russia will react to this unfriendly move…. The law on countersanctions against the United States and other unfriendly countries, which has recently come into force, gives all opportunities to harshly respond to these sanctions as well," Klintsevich told Sputnik.

Moscow has denied all involvement in cyber-attacks against the west. It has denied targeting undersea cables and argued that the west has never provided any solid evidence of such activities.

Assessment

Our assessment is that there has been increasing concern about offensive cyber capabilities in the global security and intelligence circuit. US and other nations have indicated that they will take action against Moscow’s cyber aggressions. Cyber-attacks on infrastructure, such as electricity grids, pose a huge threat to national security. As stated previously, we believe that Russia will continue to refute allegations that it is involved in malign activity overseas.

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