United States v. China: The Battle over Cyber-Espionage Results in Criminal Charges

By Steven Caponi

452686675(web)For those of us who have been active in cybersecurity, it is a well known fact that the Chinese government, acting through its military, has been the most prolific global perpetrators of cyber-espionage. Over the past several decades, China has emerged as a global power based on its economic prowess rather than its military might. As a result, the Chinese government sees the strength and health of its economy as directly tied to its national security, and by extension, the future of the ruling communist party. As an act of self-preservation, China has relied upon its military to engage in industrial espionage to ensure its companies remain competitive. This conduct has resulted in U.S. officials openly accusing China’s army of launching cyber attacks on American industrial and military targets for the purpose of stealing secrets or intellectual property. Driving this point home, Director James Comey told NBC News, “For too long, the Chinese government has blatantly sought to use cyber-espionage to obtain economic advantage for its state-owned industries.” China has aggressively denied these allegations.

Today, the war of words has moved from press releases and diplomatic protestations to the criminal charges and the courtroom. Marking a significant escalation, the United States has brought first-of-its kind cyber-espionage charges against five Chinese military officials accused of hacking into U.S. companies to gain trade secrets. The charges were lived against individuals who are believed to work for Unit 61398, the arm of the People’s Liberation Army known to specialize in cyber-warfare. Today’s indictment accuses the Chinese of targeting major U.S. private sector companies in the U.S. nuclear power, metals, and solar products industries.  Among the victims were Westinghouse Electric, U.S. subsidiaries of SolarWorld AG, U.S. Steel, Allegheny Technologies, and Alcoa.

When announcing the indictments, Attorney General Eric Holder said, “This is a case alleging economic espionage by members of the Chinese military and represent the first-ever charges against a state actor for this type of hacking.” He further stated, “The alleged hacking appears to have been conducted for no reason other than to advantage state-owned companies and other interests in China, at the expense of businesses here in the United States. … Our economic security and our ability to compete fairly in the global marketplace are directly linked to our national security.”  Eric Holder’s actions should not come as a surprise in light of comments earlier this years by John Carlin, recently installed as head of the Justice’s National Security Division, that cited prosecution of state-sponsored cyber-threats as a key goal for the Obama Administration.

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