Posts Tagged ‘cybersecurity’

China’s State Bureau of Surveying and Mapping Re-Draws International Land and Sea Boundaries — Revises Mapping Law to Bolster Territorial Claims — Everyone else “incorrectly draws the countries boundaries”

April 27, 2017

BEIJING — China on Thursday passed a revised mapping law to bolster understanding of its territorial claims and to create hefty new penalties to “intimidate” foreigners who carry out surveying work without permission, lawmakers said.

China’s National People Congress Standing Committee, a top law-making body, passed a revised version of China’s surveying and mapping law intended to safeguard the security of China’s geographic information, lawmakers told reporters in Beijing.

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President Xi Jinping has overseen a raft of new legislature in the name of safeguarding China’s national security by upgrading and adding to already broad laws governing state secrets and security.

Laws include placing management of foreign non-governmental organizations under the security ministry and a cybersecurity law requiring that businesses store important business data in China among others.

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Overseas critics say that these laws give the state extensive powers to shut foreign companies out of sectors deemed “critical” or to crack down on dissent at home.

The revision to the mapping law aims to raise understanding of China’s national territory education and promotion among the Chinese people, He Shaoren, head spokesman for the NPC standing committee, said, according to the official China News service.

When asked about maps that “incorrectly draw the countries boundaries” by labeling Taiwan a country or not recognizing China’s claims in the South China Sea, He said: “These problems objectively damage the completeness of our national territory.”

China claims almost all the South China Sea and regards neighboring self-ruled Taiwan as a breakaway province.

The new law increases oversight of online mapping services to clarify that anyone who publishes or distributes national maps must do so in line with relevant national mapping standards, He said.

The rise of technology companies which use their own mapping technology to underpin ride-hailing and bike-sharing services made the need for revision pressing, the official Xinhua news agency said on Tuesday.

Foreign organizations who wish to carry out mapping or surveying work within China must make clear that they will not touch upon state secrets or endanger state security, according to Song Chaozhi, deputy head of the State Bureau of Surveying and Mapping.

Foreign individuals or groups who break the law could be fined up to 1 million yuan ($145,000), an amount chosen to “intimidate”, according to Yue Zhongming, deputy head of the NPC Standing Committee’s legislation planning body.

(Reporting by Christian Shepherd; Editing by Nick Macfie)

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FILE — In this Dec. 24, 2015, photo, provided by Filipino fisherman Renato Etac, a Chinese Coast Guard boat approaches Filipino fishermen near Scarborough Shoal in the South China Sea. Scarborough Shoal has always been part of the Philippines, by international law. China says it is happy to control fishing in the South China Sea. Credit: Renato Etac

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On July 12, 2016 a ruling of the Permanent Court of Arbitration in the Hague said China’s nine-dash line claim (shown above) was invalid and not recognized in international law.

Despite all this:

As Dubai Focuses on Future, Cybersecurity a Growing Concern

April 26, 2017

DUBAI, United Arab Emirates — A Dubai official says as the city races toward a future of self-driving cars and drones filling up its skies, cybersecurity is becoming a growing concern.

Amer Sharaf, the director of compliance at the Dubai Electronic Security Center, gave a rare interview on Wednesday outlining the goals of his still-nascent agency in protecting the sheikhdom.

Sharaf says Dubai’s government has faced email phishing scams and other small-scale incidents affecting its networks.

He said it’s on high alert following Saudi Arabia being hit by Shamoon 2 , a new variant of a computer virus that destroyed systems of the kingdom’s state-run oil company in 2012. The emirate was not infected by it.

Sharaf spoke to journalists after giving an address at OPCDE, a cybersecurity conference being held in Dubai this week.

Suspected Russia hackers ‘targeted Macron campaign’

April 25, 2017

Researchers say the hacker group Pawn Storm tried to interfere in the campaign of French presidential front-runner Emmanuel Macron. US spy agencies suspect the group of having links to Russia’s intelligence apparatus.

Symbolbild Cyberangriff (picture-alliance/dpa/MAXPPP/A. Marchi)

French presidential candidate Emmanuel Macron’s political campaign was targeted by a hacker group with suspected Russian connections, a report by a cybersecurity research group said on Tuesday, bolstering previous suggestions that the Kremlin has been trying to interfere in the French elections.

Researchers with the Japan-based anti-virus firm Trend Micro said the Pawn Storm group, which is alleged to have carried out a number of high-profile hacking attacks in the West, used so-called “phishing” techniques in an attempt to steal personal data from Macron and his campaign staffers.

“Phishing” employs lookalike websites designed to fool victims into entering sensitive information such as usernames, passwords and credit card details. Trend Micro said it had recently detected four Macron-themed fake domains being created on digital infrastructure used by Pawn Storm, which is also known as Fancy Bear or APT28.

Trend Micro researcher Feike Hacquebord said that determining who was behind a spying campaign was a difficult challenge in the world of cybersecurity, but that he was almost certain.

“This is not a 100 percent confirmation, but it’s very, very likely,” he said.

Read more: France warns Russia

The Kremlin at work?

Trend Micro did not name any country as being behind Pawn Storm’s activities, but the group is widely suspected of having links to Russia’s security services.

The Kremlin is seen as a keen backer of Macron’s rival in the presidential race, Marine Le Pen, who espouses policies considered as likely to be favored by Moscow, such as France’s exit from the European Union. Macron has always staunchly advocated strengthening, rather than weakening, the bloc.

Russia has repeatedly denied accusations of trying to interfere in the French – or other – elections. On Monday, Kremlin spokesman Dmitry Peskov was quoted as saying that claims of the Kremlin’s attempting to influence the election outcome in France were “completely incorrect.”

Pawn Storm is also thought to be behind cyberattacks last summer on the US Democratic National Committee that were suspected to be aimed at undermining Hillary Clinton’s bid for the White House. Other suspected targets in recent months include media groups such as “The New York Times” and Al-Jazeera.
Read more: ‘Election cyberattacks threat in Germany’

Präsidentschaftswahl in Frankreich Emmanuel Macron (Getty Images/V. Isore/IP3)Macron is widely seen as likely to win the second round of elections on May 7

Attempted intrusions

The head of Macron’s digital campaign, Mounir Mahjoubi, confirmed to The Associated Press that there had been attempted intrusions, but said they had all been foiled.

Mahjoubi also confirmed that at least one of the fake sites identified by Trend Micro had been recently used as part of an attempt to steal sensitive information from campaign staffers.

An internal campaign report lists thousands of attempted cyberattacks since Macron launched his campaign last year. In February, the campaign’s secretary-general, Richard Ferrand, said the scale and nature of the intrusions indicated that they were the work of a structured group and not individual hackers.

Macron, who won the first round of France’s presidential election on Sunday, will face Le Pen in a runoff on May 7.

The French elections were carefully monitored for digital interference following suspicions that hackers backed by Moscow had attempted to influence the US electoral contest in 2016.

http://www.dw.com/en/suspected-russia-hackers-targeted-macron-campaign/a-38580848

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China’s Secret Weapon in South Korea Missile Fight: Hackers

April 21, 2017

China denies it is retaliating over the Thaad missile system, but a U.S. cybersecurity firm says they are

This 2015 handout photo from the U.S. Department of Defense shows a terminal High Altitude Area Defense interceptor being test launched on Wake Island in the Pacific Ocean.

This 2015 handout photo from the U.S. Department of Defense shows a terminal High Altitude Area Defense interceptor being test launched on Wake Island in the Pacific Ocean. PHOTO: AFP PHOTO / DOD / BEN LISTERMAN
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April 21, 2017 5:20 a.m. ET

Chinese state-backed hackers have recently targeted South Korean entities involved in deploying a U.S. missile-defense system, says an American cybersecurity firm, despite Beijing’s denial of retaliation against Seoul over the issue.

In recent weeks, two cyberespionage groups that the firm linked to Beijing’s military and intelligence agencies have launched a variety of attacks against South Korea’s government, military, defense companies and a big conglomerate, John Hultquist, director of cyberespionage analysis at FireEye Inc., said in an interview.

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The California-based firm, which counts South Korean agencies as clients, including one that oversees internet security, wouldn’t name the targets.

While FireEye and other cybersecurity experts say Chinese hackers have long targeted South Korea, they note a rise in the number and intensity of attacks in the weeks since South Korea said it would deploy Terminal High-Altitude Area Defense, or Thaad, a sophisticated missile-defense system aimed at defending South Korea from a North Korean missile threat.

China opposes Thaad, saying its radar system can reach deep into its own territory and compromise its security. South Korea and the U.S. say Thaad is purely defensive. The first components of the system arrived in South Korea last month and have been a key issue in the current presidential campaign there.

One of the two hacker groups, which FireEye dubbed Tonto Team, is tied to China’s military and based out of the northeastern Chinese city of Shenyang, where North Korean hackers are also known to be active, said Mr. Hultquist, a former senior U.S. intelligence analyst. FireEye believes the other, known as APT10, may be linked to other Chinese military or intelligence units.

China’s Ministry of Defense said this week Beijing has consistently opposed hacking, and that the People’s Liberation Army “has never supported any hacking activity.” China has said it is itself a major hacking victim but has declined to offer specifics.

Mr. Hultquist said the two hacking groups gained access to their targets’ systems by using web-based intrusions, and by inducing people to click on weaponized email attachments or compromised websites. He declined to offer more specific details.

HACK ATTACKS

Recent cyberattacks attributed to Chinese state-backed groups.

  • Since February Spear-phishing* and watering hole** attacks were conducted against South Korean government, military and commercial targets connected to a U.S. missile defense system.
  • February, March Attendees of a board meeting at the National Foreign Trade Council were targeted with malware through the U.S. lobby group’s website.
  • Since 2016 Mining, technology, engineering and other companies in Japan, Europe and North America were intruded on through third-party IT service providers.
  • 2014-2015 Hackers penetrated a network of U.S. Office of Personnel Management to steal records connected to millions of government employees and contractors.
  • 2011-2012 South Korean targets, including government, media, military and think tanks were targeted with spear-phishing attacks.
  • *Sending fraudulent emails made to look as if they come from a trusted party in order to trick a target into downloading malicious software.
  • **A strategy in which the attacker guesses or observes which websites a targeted group often uses and infects them with malware to infect the group’s network..
  • Sources: FireEye, Trend Micro, Fidelis, PricewaterhouseCoopers and BAE Systems, WSJ reporting

Mr. Hultquist added that an error in one of the group’s operational security provided FireEye’s analysts with new information about the group’s origins.

South Korea’s Ministry of Foreign Affairs said last month that its website was targeted in a denial-of-service attack—one in which a flood of hacker-directed computers cripple a website—that originated in China.

A spokesman said that “prompt defensive measures” ensured that the attacks weren’t effective, adding that it was maintaining an “emergency service system” to repel Chinese hackers.

The ministry this week declined to comment further, or to say which cybersecurity firm it had employed or whether he thought the attacks were related to Thaad.

Another cybersecurity company, Russia’s Kaspersky Lab ZAO, said it observed a new wave of attacks on South Korean targets using malicious software that appeared to have been developed by Chinese speakers starting in February.

The attackers used so-called spear-phishing emails armed with malware hidden in documents related to national security, aerospace and other topics of strategic interest, said Park Seong-su, a senior global researcher for Kaspersky. The company typically declines to attribute cyberattacks and said it couldn’t say if the recent ones were related to Thaad.

The two hacking groups with alleged ties to Beijing have been joined by other so-called hacktivists—patriotic Chinese hackers acting independently of the government and using names like the “Panda Intelligence Bureau” and the “Denounce Lotte Group,” Mr. Hultquist said.

South Korea’s Lotte Group has become a particular focus of Chinese ire after the conglomerate approved a land swap this year that allowed the government to deploy a Thaad battery on a company golf course.

Last month, just after the land swap was approved, a Lotte duty-free shopping website was crippled by a denial-of-service attack, said a company spokeswoman, who added that its Chinese website had been disrupted with a virus in February. She declined to comment on its source.

China’s Ministry of Foreign Affairs didn’t respond to questions about the website attacks. The ministry has previously addressed Lotte’s recent troubles in China by saying that the country welcomes foreign companies as long as they abide by Chinese law.

The U.S. has also accused Chinese state-backed hacking groups of breaking into government and commercial networks, though cybersecurity firms say such activity has dropped since the two nations struck a cybersecurity deal in 2015.

The two Chinese hacking groups named by FireEye are suspected of previous cyberattacks.

FireEye linked Tonto Team to an earlier state-backed Chinese hacking campaign, identified by Tokyo-based cybersecurity firm Trend Micro Inc. in 2012, which focused on South Korea’s government, media and military. Trend Micro declined to comment.

Two cybersecurity reports this month accused APT10 of launching a spate of recent attacks around the globe, including on a prominent U.S. trade lobbying group. One of those reports, jointly published by PricewaterhouseCoopers LLP and British weapons maker BAE Systems, said the Chinese hacker collective has recently grown more sophisticated, using custom-designed malware and accessing its targets’ systems by first hacking into trusted third-party IT service providers.

Because of the new scrutiny from that report, FireEye said in a recent blog post that APT10 was likely to lay low, though in the longer run, it added, “we believe they will return to their large-scale operations, potentially employing new tactics, techniques and procedures.”

Write to Jonathan Cheng at jonathan.cheng@wsj.com and Josh Chin at josh.chin@wsj.com

 

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US spies hacked global banking system – report

April 16, 2017

Deutsche Welle

A hacker group has claimed the US National Security Agency hacked into the global bank payment system known as SWIFT. It says the intelligence agency monitored payments in the Middle East and Latin America.

USA NSA Hauptquartier in Fort Meade, Maryland (picture-alliance/AP Photo/P. Semansky)

The mysterious hacker group known as “Shadow Brokers” released files late on Friday showing that the US National Security Agency (NSA) had found and exploited numerous vulnerabilities that allowed them to penetrate the SWIFT banking network.

The breach, which was carried out due to vulnerabilities in older versions of Microsoft Windows software, allowed NSA spies to monitor money flows among some Middle Eastern and Latin American banks.

Former CIA whistleblower Edward Snowden described the NSA’s hack as the “Mother Of All Exploits,” in reference to the massive US bomb dropped last week on Afghanistan. Snowden previously released files showing the NSA had the ability to intercept SWIFT messages.

knew their hacking methods were stolen last year, but refused to tell software makers how to lock the thieves out. Are they liable?

Several analysts have said that the revelations by “Shadow Brokers” are credible and that the files have almost certainly come from the NSA, as some of them bear the agency’s seals.

Bank vulnerabilities exposed

The hacking report also contained computer code that could be adapted by criminals to break into SWIFT servers and monitor messaging activity between banks, according to cybersecurity consultant Shane Shook.

Shook warned that the code could be used in operations similar to last year’s theft of $81 million from the Bangladesh central bank.

Sommercamp GenCyber NSA (picture alliance/landov)SWIFT links more than 11,000 financial institutions in more than 200 countries and territories

Another prominent security researcher, Cris Thomas, said the NSA hack was carried out “presumably as a way to monitor, if not disrupt, financial transactions to terrorist groups.”

The SWIFT messaging system, which is headquartered in Belgium, is used by banks to transfer trillions of dollars each day.

The released files appear to indicate that the NSA had infiltrated two of SWIFT’s service bureaus, allowing the monitoring of transactions of financial institutions in Kuwait, Dubai, Bahrain, Jordan, Yemen and Qatar. Service bureaus handle transactions on behalf of smaller banks.

 

Revelations downplayed

The NSA could not immediately be reached for comment, but SWIFT said in a statement that the hacking involved only its service bureaus and not its own network.

“There is no impact on SWIFT’s infrastructure or data, however we understand that communications between these service bureaus and their customers may previously have been accessed by unauthorized third parties.”

“We have no evidence to suggest that there has ever been any unauthorized access to our network or messaging services.”

One of SWIFT’s service bureaus, the Dubai-based EastNets, which was allegedly among those hacked, strongly rejected the claims as “totally false and unfounded.”

Microsoft, meanwhile, said it has already patched the vulnerabilities found in the hack. In a statement, the tech giant said it had not been contacted by the NSA about the breach.

“Shadow Brokers” has previously released leaked malware which it attempted to sell for tens of millions of dollars. But the group’s identity remains a secret.

http://www.dw.com/en/us-spies-hacked-global-banking-system-report/a-38437946

PHOTO: REUTERS

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 (Contains links to several related articles)

China Moves to Further Tighten Regulation of Digital Information — More people will need permission to transfer data out of China

April 12, 2017

Proposed rules would make foreign companies get permission to transfer data outside the country

Customers used the internet at a Beijing cafe in 2015. Foreign companies with business operations in China would need permission to transfer data out of the country under draft rules.

Customers used the internet at a Beijing cafe in 2015. Foreign companies with business operations in China would need permission to transfer data out of the country under draft rules. PHOTO: HOW HWEE YOUNG/EUROPEAN PRESSPHOTO AGENCY

BEIJING—Foreign companies with business operations in China would be required to apply for permission to transfer data out of the country under draft rules released Tuesday, in the government’s latest move to tighten regulation of digital information.

The rules would affect all so-called network operators, a term that industry experts say likely encompasses technology companies, as well as other firms that do business through computer networks, such as financial institutions.

The rule would apply to companies seeking to move more than one terabyte of data out of China, or that have data on more than 500,000 people.

For example, consumer companies that have collected a large database of email addresses, birth dates or other information on their Chinese customers would appear to be required to get the permission of both their customers and the Chinese government before transferring that data out of the country.

The data would then be reviewed and blocked if the government believes it would hurt China’s political system, economy, technology or security.

The Cyberspace Administration of China said the rules were necessary to “secure personal information and the safety of important data, as well as to protect internet sovereignty and national security.”

The CAC didn’t respond to a request for additional comment. In the past, the government has broadly defined business operations that could affect the national interest, meaning that companies engaged in such disparate areas as health care, construction and finance could come under the rule’s purview.

The draft drew some industry criticism Tuesday. Multinational companies are generally opposed to data localization—keeping data physically stored in the country where it originates—saying that rules mandating the practice raise costs by requiring duplicate infrastructure and impede cross-border business.

“The strongest international standards to protect data privacy are determined by industry consensus, draw on global best practices, and are largely blind to where data is stored or transferred,” said Jake Parker, vice president of the U.S.-China Business Council.

The rules would broaden data-localization requirements to all “network operators,” versus the narrower set of “critical infrastructure” operators under last year’s cybersecurity law, said Bing Maisog, a partner of law firm Hunton & Williams.

“You could say it’s a revisiting of the law,” Mr. Maisog said.

The draft is open for public comment until May 11 and could change in its final form. Other recent Chinese cybersecurity regulations have been weakened in their final version after pushback from companies and foreign governments.

Data localization has also been controversial in Europe, where some countries require local data storage for security. The European Union is seeking public comment on data-localization rules.

Under the draft Chinese rules, smaller companies with data on fewer than 500,000 users could conduct a self-assessment instead of applying for government review.

Write to Eva Dou at eva.dou@wsj.com

Russian hacker detained in Spain at the request of American authorities — Possibly linked to the U.S. presidential election

April 10, 2017

By ARITZ PARRA AND RAPHAEL SATTER, ASSOCIATED PRESS

MADRID — Apr 10, 2017, 7:44 AM ET

An alleged Russian hacker has been detained in Spain at the request of American authorities, an arrest that set cybersecurity circles abuzz after a Russian broadcaster raised the possibility it was linked to the U.S. presidential election.

Pyotr Levashov was arrested Friday in Barcelona on a U.S. computer crimes warrant, according to a spokeswoman for Spain’s National Court, who spoke on condition of anonymity in line with court rules.

Such arrests aren’t unusual — American authorities typically try to nab Russian cybercrime suspects abroad because of the difficulty involved in extraditing them from Russia — but Levashov’s arrest drew immediate attention after his wife told Russia’s RT broadcaster that he was linked to America’s 2016 election hacking.

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RT quoted Maria Levashova as saying that armed police stormed into their apartment in Barcelona overnight, keeping her and her friend locked in a room for two hours while they quizzed her husband. She said that when she spoke to her husband on the phone from the police station, he told her he was told that he had created a computer virus that was “linked to Trump’s election win.”

Levashova didn’t elaborate, and the exact nature of the allegations weren’t immediately clear. Malicious software is routinely shared, reworked and repurposed, meaning that even a computer virus’ creator may have little or nothing to do with how the virus is eventually used.

Levashov’s name is familiar in cybercrime circles. He has been alleged to be spam kingpin Peter Severa, according to Brian Krebs, a journalist who has written extensively about the Russian cybercrime underworld, and Spamhaus , a group which polices spam.

Levashov himself couldn’t immediately be reached for comment, and officials did not say whether he had a lawyer

The U.S. Embassy in Spain declined comment. Russian Embassy spokesman Vasily Nioradze confirmed the arrest but wouldn’t say whether he was a programmer, as reported by RT. He wouldn’t comment on the U.S. extradition order.

“As it is routine in these cases, we offer consular support to our citizen,” he said.

The Spanish spokeswoman said Levashov remains in custody.

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Satter contributed from London. Nataliya Vasilyeva in Moscow contributed to this report.

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U.S. Senate hearing: Russian meddling did not stop at the election

March 30, 2017

Updated 12:53 PM ET, Thu March 30, 2017

Washington (CNN) — The Senate intelligence committee opened its first public hearing on Russian meddling in the US election Thursday with calls for nonpartisanship, citing ongoing foreign interference that threatens “the heart of our democracy.”

“The vice chairman and I realize that if we politicize this process, our efforts will likely fail,” Committee Chairman Richard Burr, a North Carolina Republican, said in his opening remarks. “The public deserves to hear the truth about possible Russian involvement in our elections, how they came to be involved, how we may have failed to prevent that involvement, what actions were taken in response, if any, and what we plan to do to ensure the integrity of future free elections at the heart of our democracy.”
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One finding from the hearing so far: Russian interference with American politics did not stop after the election.

 Senate Intelligence Committee Chairman Richard Burr, right, and Vice Chairman Mark Warner, left, have vowed to go where the intelligence leads them in their probe of Russia’s meddling in the 2016 election. Susan Walsh/AP
Russian operatives have even been active in US politics through this week, driving a wedge between Republicans after the fallout from the health care bill failure, said Clinton Watts, a senior fellow at the Center for Cyber and Homeland Security at George Washington University.
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“This past week we observed social media campaigns targeting speaker of the House Paul Ryan hoping to foment further unrest amongst US democratic institutions,” Watts told senators.
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Russians had also targeted politicians, even those — including Sen. Marco Rubio — who sat on the intelligence panel.
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“They were in full swing during both the Republican and Democratic primary season — and may have helped sink the hopes of candidates more hostile to Russian interests long before the field narrowed,” Watts said. “Sen. Rubio, in my opinion, you anecdotally suffered from these efforts.”
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There’s little chance that Thursday’s hearing will be as explosive as the House intelligence committee’s first public hearing last week, which started off with FBI Director James Comey confirming the FBI is investigating possible coordination between Trump campaign aides and Russian officials and included Trump himself fighting back during the hearing on Twitter.
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The differences between chambers was on full display as the Senate — which gives the top Democrat on committees the title of vice chairman, unlike House’s “ranking member” equivalent — stressed bipartisan cooperation, the same day the leaders of the House committee were planning to meet and discuss the state of their troubled investigation.
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Thursday’s hearing was not entirely without reference to political issues. Sen. Ron Wyden, an Oregon Democrat, made the case that the committee needed access to President Donald Trump’s tax returns in order to investigate whether he’d been influenced by Russians.
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“We need to follow the money,” Wyden said. He also sought to understand the ties between Putin’s administration, Russian oligarchs and Russian crime organizations, saying: “Russia’s corruption problem, may be our corruption problem.”
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Watts responded that Wyden should “follow the trail of dead Russians,” a clear reference to Putin critics who have turned up dead.
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Senate investigators are hearing from experts on disinformation tactics — tools used by Russian operatives in the US elections and elsewhere to disrupt elections.
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“We are seeking to determine if there is an actual fire, but so far, there is a great, great deal of smoke,” Sen. Mark Warner, the top Democrat and vice chairman of the committee, said in his opening remarks.
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There is a brighter spotlight on the Senate committee to investigate Russian meddling in the election as its House counterpart has shattered along partisan lines, and even some Republicans calling on the Senate panel to lead Congress’ probe.
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Senate lawmakers also plan to interview former National Security Agency Director Keith Alexander and FireEye chief executive Kevin Mandia, a pair of cybersecurity experts, who are expected to answer questions about how Russian agents and an army of trolls utilized “fake news” throughout the 2016 election.
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“There were upwards of 1,000 paid Internet trolls working out of a facility in Russia, in effect, taking over series of computers, which is then called a ‘botnet,'” Warner, a Virginia Democrat, said Wednesday. “If you Googled ‘election hacking’ leading up to the election and immediately afterwards, you wouldn’t get Fox or ABC, The New York Times, what you got is four out of the first five news stories that popped up were Russian propaganda.”
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Burr, meanwhile, said that he is keenly interested in Russia’s attempts to influence European elections and whether Russian efforts in the US offer insights into their efforts to disrupt elections in Western democracies like France and Germany.
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“We feel part of our responsibility is to educate the rest of the world about what’s going on because it’s now into character assassination of candidates,” Burr said Wednesday.
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Since that hearing, the House investigation has descended into chaos, but Senate investigators have stuck to a steady pace, largely ignoring their House colleagues.
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Warner and Burr both said Wednesday they are taking a deliberative approach — trying to learn as much as possible before calling in high-profile witnesses like former National Security Adviser Michael Flynn, former Trump campaign chairman Paul Manafort, former Trump foreign policy adviser Carter Page and former Trump adviser Roger Stone.
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Seven professional staff from their committee have been given special security clearances to review the documents and now have access to the same materials usually limited to Congress’ “Gang of Eight” — the Republican and Democratic leaders of the House and Senate and their respective intelligence committees.
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And even though Manafort and Jared Kushner — one of Trump’s closest advisers who served as an intermediary for foreign policy and met with top Russian officials during the transition — have offered to testify before Senate investigators, no date has been scheduled yet for them to come in.
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Instead, Warner and Burr said that they have a list of 20 witnesses they plan to call in and have scheduled meetings with five of those witnesses so far. Both men declined to name those witnesses, but Burr implied it would be smart to expect Flynn to be on that list.
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This story has been updated and will update to reflect breaking news.

Includes video:

http://www.cnn.com/2017/03/30/politics/senate-intelligence-committee-hearing-russia/

Arab Nations Push to Develop Their Own Defense Industries

March 29, 2017

Moves force established players to weigh partnerships with local manufacturers

Nimr Automotive, a company based in the United Arab Emirates, is making military vehicles.

Nimr Automotive, a company based in the United Arab Emirates, is making military vehicles. PHOTO: NICOLAS PARASIE/THE WALL STREET JOURNAL
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Wealthy Gulf Arab states have a warning for Western suppliers of military equipment: If they want business, they have to transfer technical knowledge to local companies that are part of a rising, homegrown defense sector.

Saudi Arabia and the United Arab Emirates, with troops fighting in neighboring Yemen and participating in allied airstrikes against Islamic State, already have some of the region’s most advanced forces. But they are limited in their ability to maintain and repair sophisticated military equipment—let alone manufacture it.

The rulers want to become less dependent on the U.S. and other Western countries, and they see defense as a sector that can help diversify their oil-based economies.

The Saudi government, the world’s No. 3 defense spender after the U.S. and China, last year announced it wants half the money it allots for military equipment to go to local firms by 2030, up from 2% today.

Even if the kingdom only partly achieves its goal, the impact will reverberate through the global defense industry. In 2015, Saudi Arabia military expenditures totaled around $87.2 billion, according to the research firm Stockholm International Peace Research Institute.

“We spend more than Britain, and France, and don’t have industry. We have a strong demand that we should meet inside Saudi Arabia,” Saudi Arabia’s defense minister, Deputy Crown Prince Mohammed bin Salman, said in a televised interview last year.

The prince added that, under new official policies, the Saudi government would agree to defense deals with foreign providers “only if they are linked to local industry.”

That message is trickling down. AM General, the South Bend, Ind.-based maker of the Humvee, said in February it was starting to export commercial chassis abroad. That allows customers, including partners in the Gulf, to assemble customized versions of their armored vehicles locally.

“The bottom line is they want to spend more of their money in their country,” says Nguyen Trinh, an executive at AM General.

Saudi Arabia’s Advanced Electronics Company, a Riyadh-based supplier of defense equipment like signal jammers and lasers, recently entered a new partnership with Raytheon Co. for a Saudi-government contract to develop cybersecurity capabilities. Raytheon declined to comment on the contract.

Local defense firms cite the deal as evidence foreign suppliers are scouting for new or expanded partnerships. “Instead of us pulling them, they are the ones pushing—they are approaching us,” says Mohammed Al Khalifa, the vice president of AEC, which is jointly owned by British weapons maker BAE Systems and Saudi investors.

Big global contractors such as Boeing Co. say they see opportunities for opening new production lines in the Middle East. “Boeing will continue to look for potential partnership opportunities for mutual growth of business,” Bernard Dunn, president of Boeing Middle East, North Africa and Turkey, said in an email.

But such opportunities are no simple matter for the foreign contractors. Policy rules in the U.S. and Europe would allow the manufacturing of some components to be outsourced, but the rules are stricter for sensitive military technology.

In Abu Dhabi two years ago, a senior U.S. Department of Defense official told potential Gulf buyers and industry executives that they wouldn’t be allowed in the foreseeable future to buy Lockheed Martin  Corp.’s radar-evading F-35 Joint Strike Fighter, according to Danny Sebright, president of the U.S.-U.A.E. Business Council and a former Defense Department official, who was there.

Image result for F-35 Joint Strike Fighter,, photos

https://www.gizmodo.com.au/2014/04/australia-set-to-boost-joint-strike-fighter-order-to-72-a-brief-history-of-the-f-35/

The official alluded to rules to ensure Israel maintained a competitive military edge in the region.

The Emiratis decided to turn to Russia. The U.A.E.’s defense ministry said in February it would jointly develop a light combat fighter with Russia’s state-run defense corporation Rostec.

“It was completely a statement to the Americans and to the Europeans that, if you don’t give us what we need, if you don’t help us with what we need, we have no choice but to try to get it somewhere else to protect our legitimate security needs,” said Mr. Sebright.

Saudi Arabia reached a deal earlier this month with China to jointly manufacture drones.

“It’s a very important marketplace—and we have to adapt to it,” said a Gulf-based executive with a U.S. defense firm.

Many Gulf-based defense companies were established decades ago under offset programs that required foreign suppliers to invest part of their compensation locally. The push into manufacturing, however, is new.

Alsalam Aerospace Industries, a firm based in Riyadh and partly owned by Boeing Co., wants to manufacture its first complete aircraft by 2030. Last year, with Boeing’s help, the company started assembling wings and forward fuselages in its factory to upgrade F-15 jet fighters for the Royal Saudi Air Force.

The bottom line is they want to spend more of their money in their country.

—Nguyen Trinh, an executive at AM General

“We want to be the Lockheed Martin or the Boeing of Saudi Arabia,” says Yehya Al Ghoraibi, the company’s chief executive.

The company is expanding into helicopter maintenance and repair. In the more distant future, Mr. Ghoraibi is considering expanding into areas ranging from tank manufacturing to bomb making.

The U.A.E. is already producing armored vehicles. In February, the country’s armed forces awarded a contract of 1,750 armored vehicles to an Emirati company, NIMR Automotive. It was a rare example of a local business securing a deal of such size.

In 2014, the U.A.E. merged more than a dozen state-owned firms under a conglomerate called the Emirates Defence Industries Company, It is led by Luc Vigneron, the former head of Thales SA, Europe’s leading defense electronics maker.

NIMR, one of the conglomerate’s subsidiaries, produces around four vehicles a day and looking to export to Eastern European and Asian markets.

In a sign of how the development of the local defense industry is shaping career perspectives, many of NIMR’s engineers are Emirati. “My father thought a successful path would be in oil and gas,” recalls 29-year-old Omran Alhashemi.

Write to Margherita Stancati at margherita.stancati@wsj.com and Nicolas Parasie at nicolas.parasie@wsj.com

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China’s New Industrial War — Influence and Power — China’s program to surpass the West

March 21, 2017
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New Chinese economic theft campaign detailed by insider
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The Chinese Communist Party (CCP) has a new program for economic warfare, one that follows a path well trodden in the history of industrial competition.

According to a source in China who conducts business at the top levels of the CCP, the new program was launched in mid-2015 to early 2016 as a legal replacement to the CCP’s former model of using cyberattacks to steal information for economic gain.

On Sept. 25, 2015, then-President Barack Obama met with CCP leader Xi Jinping at the White House, where they announced a new bilateral agreement that said neither country would use cyberattacks to steal intellectual property, trade secrets, or other confidential information for “commercial advantage.”

The background of the meeting was that state-run cyberattacks from China had been stealing from the U.S. economy, and Obama had begun threatening to sanction Chinese companies that profited from the cyberattacks. The agreement diverted the sanctions.

As part of China’s program to surpass the West, it is relying less on cyberattacks and more on foreign acquisitions and joint ventures.

Already, however, business leaders and high-level officials in China are acting on an alternative plan for, as the CCP’s program for economic theft Project 863 puts it, “catching up fast and surpassing” the West.

“What they’re doing is sending teams of individuals to the United States—they’ll hook up with their current partners, and make new partners—to be able to do the same song and dance as before,” said the source, who requested to remain unnamed for personal security.

“The other part is, they’re coming to this country to begin to set up shop, business-wise,” he said. The teams come in order to learn more directly the tradecraft and business operations of Western companies “and steal it to bring back to their country.”

He gave an example of this in motion, noting a Chinese company that makes industrial unmanned aerial vehicles that had begun setting up joint ventures with U.S. companies.

“They want to be able to have their company in the United States and be able to make a connection with another company, work with that company, then be able to bring people or technology back to the mainland,” he said. “That’s the main focus of what they want to do.”

The CCP has moved quickly in its push for foreign acquisitions and joint ventures, and by fall 2016 its effects were already becoming visible.

According to data from New York-based advisory firm Rhodium Group, annual Chinese direct investment in the United States nearly tripled in 2016 from the previous year, going from $15.3 billion to $45.6 billion.

The shift caused a stir in business and political circles, not just in the United States but around the world.

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In February 2016, The New York Times reported on a growing political backlash in Washington over Chinese companies attempting to purchase U.S. technology companies.

Bloomberg reported in August 2016 that Chinese takeovers triggered a global backlash ahead of the G-20 Summit, and The Trumpet reported that in Australia, the federal treasurer rejected two deals from China for power companies, valued at over $7.6 billion, over security concerns.

In August 2016, Israel’s Haaretz published an analysis titled “Why China Is on a Shopping Binge in Israel,” noting the acquisition trend but missing the motivation behind it. The reporter said Israel, with a solid economy and reputation for innovation, was merely an attractive parking lot for Chinese capital flight.

A Classic Strategy

The new push from the CCP for economic gain is not a novel approach, according to Amar Manzoor, author of “The Art of Industrial Warfare.”

“They’ve essentially copied Japan,” Manzoor said, referring to the CCP’s new program.

A similar situation took place in the 1950s. Manzoor noted that many Toyota cars used to look like Ford Mustangs, but were sold at a cheaper price. After they broke into the American market, Toyota partnered with American manufacturer General Motors to create the New United Motor Manufacturing plant.

By partnering with a major U.S. company to build a manufacturing plant in the United States, Toyota was able to test how receptive Americans would be to full-fledged Toyota plants in their own backyard. It also allowed Toyota to begin developing supply chains in the United States.

The value of controlling factories goes far beyond profit.

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Manzoor said many countries have gone through the process of copying a foreign competitor, then partnering with companies within the target market.

He noted that Indian automaker Tata Motors bought majority shares in Jaguar Land Rover, which is likewise helping them transfer automaker skills to India.

“Everything India is doing is based on industrial warfare. It wants access to the technology, it wants the plants,” Manzoor said. “This is the same thing with China.”

“What tends to happen is, you get these industrial hubs by doing that,” he said, noting it’s not just rising countries trying to build industrial hubs, but also developed countries, including the United Kingdom and the United States.

The value of controlling factories goes far beyond profit.

People involved in manufacturing—the folks who build the products—are often the ones who think of ways to improve the existing products.

Industrial innovation in the United States has been dropping due to competition from Chinese imports, according to a recent report from the National Bureau of Economic Research, which points out that fewer patents are being filed in the United States.

The country that controls the factories also controls the job market, and any nation well-versed in strategies of industrial warfare will also try to gain control of raw materials and the full supply chain.

With China in particular, Manzoor said, “They want to control supply and demand, and the best way to do that is to control the marketplace itself. This is where the industrial war is trending right now.”

When industrial warfare reaches this level, it also begins to affect national security.

According to a U.S. Army report, “Chinese companies’ access to resources, technologies, markets, and elites translates into means of influence and power than can be harnessed for a whole host of objectives that are not necessarily focused on commercial goals only.”

To show how this could play out, Manzoor gives the example of how during World War II, factories were re-purposed for the defense industry, and companies that had previously been building cars were instead building tanks and fighter planes.

If a country is pulled into a war unexpectedly, while also lacking domestic manufacturing, it will then need to build the factories, skills, and supply lines from scratch.

An Internal Shift

The CCP has reduced its cyberattacks against the United States, although some of its hacker units remain active. Cybersecurity company FireEye reported in June 2016 that since mid-2014, “we have seen a notable decline in China-based groups’ overall intrusion activity against entities in the U.S. and 25 other countries.” It says U.S. action responding to the attacks “may have prompted Beijing to reconsider the execution of its network operations.”

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The CCP’s new program on state-sponsored cyberattacks has two points of focus: one, to expand the reach of Chinese factories, and two, to steal intellectual property from competitors directly.

According to the source in China, “the only way they can innovate is by doing one thing: steal.”

It builds on existing programs for economic theft the CCP already had in place, which ran parallel to its cybertheft operations. These include its Torch program for high-tech commercial industries, its 973 Program for research, and its 211 program for using universities.

According to the book “China’s Industrial Espionage,” all of these programs leverage “foreign collaboration and technologies to cover key gaps” and use methods that include encouraging skilled experts to return to China, or to have them “serving in place,” providing information they gained from Western employers.

The economic situation in China isn’t as flashy as the regime wants the world to believe. The source in China said “the business environment has completely changed,” he said. “It has changed for the worse.”

Companies are realizing that due to the lack of a middle class, the actual Chinese market is only about 200 million out of a total population of 1.3 billion.

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“There are some significant problems going on. There are a lot of people unemployed. They are looking for answers, and the government does not seem to have them,” he said. “There are a lot of protests taking place there as well, which were not there before. … You’re talking thousands of people. They have signs and they have stuff spray-painted on their shirts as well, and they get into fights very quick.”

“These people have lost money. They’ve lost their life savings, the government is not answering to their needs, and businesses are trying to get new sales.”

Meanwhile, he said, “the innovators are leaving in droves. They’re either being chased out by the government, or they’re realizing the government is stealing their stuff.”

“They’re not making enough money and they’re not getting enough orders from their customers,” he said. Companies are realizing that due to poverty levels, and due to the lack of a middle class, the actual Chinese market is only about 200 million out of a total population of 1.3 billion.

Meanwhile, many companies used to have their products manufactured in China, but as local wages increase—and as other countries such as India and Indonesia grow their own manufacturing bases—the cost benefit of manufacturing in China is starting to fade.

The CCP is now trying to build a middle-class economy and to start making strong pushes to bring Chinese products—such as Lenovo computers and Xiaomi smartphones—into global competition. It is also making strong pushes to acquire raw materials and to negotiate trade deals.

Moving away from reliance on Western products and technology is now a high priority for the CCP.

The CCP is also pushing out some companies directly. The strategy, the source said, is that it is selectively pushing foreign companies out of China if their own domestic products are at a level where they could compete with each other in global or third-world markets. The companies they’re keeping in China are the ones they can still learn from.

“This is a new push [to buy or partner with companies outside China] that’s taking place,” the source said, “because as they push people out, they need something to replace the lost innovation.”