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RISK: U.S. may consider sanctions against China if it breaks cyber espionage deal | Canadian Insurance

RISK: U.S. may consider sanctions against China if it breaks cyber espionage deal

The two countries have agreed not to spy on each other for economic, though not security, reasons

If the U.S. determines Chinese hackers are conducting economic cyber espionage on American industry, it may consider criminal charges or sanctions against China, says John Carlin, the Obama administration’s top national security attorney.

The two countries have an agreement not to spy on each other for economic reasons, which the Obama administration has described as a historic and important step acknowledging hacking and labeling it as illegal theft.

The government has filed criminal indictments against specific Chinese military hackers in a previous case, and it can impose trade sanctions against foreign government officials and agencies it believes are responsible.

A few weeks after the agreement, California-based company CrowdStrike Inc. said it detected at least seven Chinese cyberattacks against U.S. technology and pharmaceutical companies that appear clearly aimed at theft of intellectual property and trade secrets.

“I haven’t seen any notable decline in intrusions affiliated with China,” said Dmitri Alperovitch, co-founder of CrowdStrike. The company wrote one of the first public accounts of commercial cyberespionage linked to China in 2011. Alperovitch urged organizations to remain vigilant until there was more information about how the administration intends to enforce the agreement.

The agreement does not prohibit cyber spying for national security purposes, which would ostensibly include the theft of personal information for 21 million Americans when the Office of Personnel Management was hacked in what the U.S. believes was a Chinese espionage operation. The OPM hack was the most serious known cyber breach in U.S. history.

The Obama administration has avoided publicly blaming China or taking any public action in retaliation. Intelligence officials have said the data was a fair target and the U.S. would have stolen the same information on China if possible.