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Obama Administration Proposes Sanctions In Retaliation For Chinese Cyberhacks

With Chinese president Xi Jinping making his first state trip in September, the U.S. government is proceeding with caution.

Obama Administration Proposes Sanctions In Retaliation For Chinese Cyberhacks
[Photo: Feng Li/Getty Images]

The extensive breach of the U.S. Office of Personnel Management, which was revealed earlier this summer and compromised the records of 22 million Americans, was almost certainly the work of Chinese hackers. In an effort to curb cyberhacking, the White House is currently developing economic sanctions that would impede the operations of Chinese companies in the U.S., the Washington Post reports.

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The proposed action would undercut companies and individuals that have negatively impacted the U.S. economy, foreign policy, or national security, the Washington Post writes:

The executive order authorizes the Treasury secretary, in consultation with the attorney general and secretary of state, to impose the sanctions on companies, individuals or entities that have harmed national security, or the nation’s economy or foreign policy. It’s not clear how many firms or individuals will be targeted, though one official said the Chinese firms would be large and multinational. Their activity must meet one of four “harms”: attacking critical infrastructure, such as a power grid; disrupting major computer networks; stealing intellectual property or trade secrets; or benefiting from the stolen secrets and property.

The sanctions have not yet been put in place, in large part due to the tenuous relationship between the two nations. Chinese president Xi Jinping is making his first state visit to the U.S. in September, which further complicates things; the government may be wary of rocking the boat so close to his arrival. According to Bloomberg, some officials have even suggested that rather than implementing sanctions outright, Obama should privately tell Jinping that the U.S. will take such action if hacking escalates.

Still, even if the administration employs cautionary measures, it seems unlikely that it will scrap the plan altogether, given the breadth of Chinese cyberattacks. Officials with knowledge of the matter informed the Washington Post that a decision could be passed down within the next two weeks.

“Let’s be honest, I can see the White House saying, ‘Let’s not do [sanctions] while the head of state is here,” one administration official told the Washington Post. “I can see maybe they’d shift the timing by a few days… but I can’t imagine they’d shift the overall decision.”

Last fall, FBI director James Comey told 60 Minutes that virtually every major business in the U.S. had been hacked by the Chinese in some capacity. “There are two kinds of big companies in the U.S.,” Comey said. “Those who’ve been hacked by the Chinese, and those who don’t know they’ve been hacked by the Chinese.”

[via Washington Post]

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About the author

Pavithra Mohan is an assistant editor for Fast Company Digital. Her writing has previously been featured in Gizmodo and Popular Science magazine.

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