The Virtual War against Cybercrimes in America

By Tiffany-Ashley Disney – “[C]yber threats are some of the most serious national security and economic challenges facing the United States,” stated Michael Daniel, Special Assistant to the President and Cybersecurity Coordinator, during an On-the-Record Press Call regarding the President’s Executive Order, “Blocking the Property of Certain Persons Engaging in Significant Malicious Cyber-Enabled Activities.” On April 1, 2015, after “declaring a national emergency”  (emphasis added) with regard to cyber threats to the United States, President Obama signed the order in an effort to combat the national security threats created by individuals or entities overseas who engage in cyber-crimes.  As cyber-crimes are evidently present in the U.S., the need for the order is clear.

In August of this year, the United States began developing a package of economic sanctions to impose on Chinese companies and individuals who benefited from the Chinese government’s cyber theft of U.S. trade secrets, marking the first time the authority granted by the order would be used since the order was signed. Despite cyber-crimes being a national emergency, some predicted that the sanctions would not be imposed as President Xi Jinping of China has scheduled a visit for the United States for late September 2015.

President Obama’s authority to sign the order stems from the International Emergency Economic Powers Act, 50 U.S.C. § 1701, and the National Emergencies Act, 50 U.S.C. § 1601. The purpose of the order is for the United States to be able to impose sanctions on an individual or entity who has “create[d] a significant threat to the national security, foreign policy, or economic health or financial stability of the United States”through the acts of cyber espionage. This order does not typically provide individual police support for companies, but may do so if the threat to that company poses a significant economic threat to the United States as well. Companies or individuals being sanctioned under this order still have due process rights. This order is not replacing any current police powers but instead is complimenting current police powers.

There was a similar order allowing the United States to place sanctions on companies in North Korea who committed cyber-crimes. This order differs from the North Korea order because this order is not country specific but instead targets specific criminal acts and is not aimed to target any one country’s cyber-crimes in particular.

The order gives the Secretary of the Treasury, in conjunction with the Attorney General and the Secretary of State, the authority to issue sanctions to an individual or entity who is reasonable believed to have engaged in the following:

  • “Knowingly receive or use trade secrets that were stolen by cyber-enabled means for commercial or competitive advantage or private financial gain, where the underlying theft of the trade secrets is reasonably likely to result in, or has materially contributed to, a significant threat to the national security, foreign policy, or economic health or financial stability of the United States (for example, where a corporation knowingly profits from stolen trade secrets); or
  • Attempt, assist in, or provide material support for any of the above harms.”

Possible sanctions include the blocking of property and interests in property in the United States. In other words, the order grants the authority to freeze assets in America belonging to foreign individuals or entities. The order also denies entry to the United States by individual who are reasonably believed to have engaged in any of the above-listed activities.

As predicted, the sanctions have not been imposed on the Chinese individuals or companies. Imposing sanctions under the order can be a delicate balance. Nevertheless, some call into question the wisdom of the decision not to impose sanctions on entities in China and have even suggested canceling President Xi’s visit to the United States as the decision to forego imposing sanctions does not take steps toward solving the issue of cyber-crime attacks from Chinese individuals or entities. The decision to not impose sanctions could potentially negatively impact the long-term effectiveness of the order. Only time will tell whether the mere threat of sanctions was a sufficient deterrent to cause entities or individuals to stop engaging in cyber-crimes against the United States.

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